Number of bankruptcies in Russia have reached a record level

The number of bankruptcies in Russia in the third quarter increased by 3% compared to the second quarter. The country registered 3,227 bankruptcies, higher than July-September 2016. These increases were reported by the Center for Macroeconomic Analysis and Short-term Forecasting.

The report notes that two factors could have led to the increase in the number of bankruptcies: weak consumer demand and a slow decrease in the key rate. The Russian Federal State Statistic Service or Rosstat indicates real incomes of the population have fallen 12 quarters in a row. The key rate, which was 10% at the beginning of the year, fell to only 8.25% by the end of October, taking into account that inflation was falling faster.

Bankruptcies in August to September even slightly exceeded the peak value of March 2015, the Center reports. The current fixed level is only 2.1% below the record value of October 2009.

The largest number of bankruptcies in the third quarter, about 300 bankruptcies in September, occurred in the trade industry, the food industry and the machine building industry. Commercial services and metallurgy experienced negligible decreases in the index of bankruptcies.

The current trend may have been related to reports in May that Russia’s foreign creditors drastically reduced the purchase of Russian bonds.

  Economy of Russia, Russia