Russian economic meltdown as 7,000 companies face bankruptcy.

Russia's economic crisis is intensifying with thousands of companies reportedly facing bankruptcy. Businesses have been hit by a double whammy of sanctions and high interest rates, since the outbreak of the full-scale war in February 2022.

The key interest rate rose to a staggering 21% last autumn, the highest it had been since the early 2000s. The Central Bank was forced to hike the rate due to spiralling inflation, but has since cut it back down to 16.5%. Nevertheless, Russian businesses are struggling to make ends meet, and are fighting for their existence.

Transport companies are facing mass bankruptcies (Image: Getty)

Many now face the end of the road, as costs and debts surge, but income falls.

The Russian newspaper Izvestia reports that almost 7,000 transport companies are facing bankruptcy.

The paper notes that a collapse in transport companies will add to the economic woes of ordinary Russians, as prices of goods and delivery are likely to surge as a result.

In more bad news, the daily broadsheet noted that the share of Russian companies with overdue loans had reached a record one in four.

High debt burdens, falling profits due to lower demand and rising costs for servicing old loans were listed as the main reasons for the inability of firms to pay back the banks. The paper noted that all of this doubled the risk of defaults and more bankruptcies in the near future.

One manufacturing sector that is especially feeling the heat is trucking, with the sale of new vehicles plummeting.

New data shows that the market fell by 47.9% in the first quarter of 2025 and by 63.6% in the second.

In the third quarter, 10,800 heavy-duty vans were sold, down 60% from the previous year.

Russia's steel industry is also under immense pressure, with the country's largest producer reporting a steep drop in profit and revenues.

Severstal, controlled by billionaire Alexei Mordashov, posted a third-quarter profit of 12.99 billion rubles ($160m), down threefold from a year earlier. The sector has been hit hard by sanctions, a decline in construction and fierce competition from China.