The Central Bank of Russia reports an improvement in the business climate among Russian companies in August. One reason is the stabilisation of the fuel situation, the central bank says. The main improvement was in companies’ short-term expectations for future output and demand, while current assessments of demand continued to deteriorate. Small businesses have the weakest sentiment. They continue to feel the high cost of financing, weak demand and rising costs more acutely, experts say.
Business activity edged up in August after a marked decline in July, the Central Bank said. The regulator’s business climate indicator (BCI) stood at –2.4 points, compared with –3.5 points a month earlier. It therefore remained in negative territory. Current business climate assessments fell across the economy as a whole and in most sectors in August, with the sharpest decline in manufacturing.
ИБК сводный BCI
Крупные Large companies
Средние Medium companies
Малые и микро
Small and microbusinesses
Central Bank business climate indicator by company size. Source: Central Bank of Russia
According to the regulator headed by Elvira Nabiullina, the improvement in the indicator in August was driven by a slight improvement in current output assessments and stronger short-term expectations among companies. ‘The main positive contribution to the change in the BCI in August came from services, mining and transportation,’ the Central Bank said. It stressed that these sectors assessed current conditions as ‘less negative’ in August
Short-term business expectations also improved in August after declining for the previous three months. However, the level remains below that seen in 2023–2025, the regulator said. ‘Compared with July, expectations improved in almost all sectors except agriculture,’ the Central Bank said
Business sentiment also varied by company size. Business climate assessments improved among large companies, were virtually unchanged among small and microbusinesses, and deteriorated among medium-sized companies.
At the same time, companies reported weaker demand for their products. According to the Central Bank, current demand assessments declined for the second consecutive month in August, returning to levels last seen in the second quarter of 2022. Demand weakened across all sectors, most notably in manufacturing, agriculture and construction. At the same time, companies’ short-term demand expectations, looking three months ahead, improved in August after three months of decline. The improvement was seen in almost all sectors, with agriculture the exception.
Despite weaker demand, companies’ current assessments of output in August were slightly better than in July, although they remained close to second-quarter 2022 levels. Output assessments improved in industry and transportation. The Central Bank said transport companies’ assessments rose partly because fuel shortages had become somewhat less acute. By contrast, conditions continued to deteriorate in trade and services. In construction, output assessments fell to their lowest level since April 2022.
Companies most frequently cited rising costs as a factor constraining current activity. Some 23% of respondents pointed to this factor. One in five respondents cited insufficient domestic demand as a constraint. The Central Bank stressed that this was particularly significant for small and microbusinesses. Other factors included insufficient funds to finance working capital, labour shortages and logistics problems. At the same time, companies’ output expectations improved in August across almost all types of activity.
In August, companies reported slower growth in costs than a month earlier. In July, cost growth had reached its highest level since May 2022. One of the main factors behind higher costs was the increase in fuel and lubricant prices caused by temporary fuel shortages in some regions. Businesses also cited higher purchase prices and logistics costs
The growth in companies’ selling prices, by contrast, slowed in August. Trends varied across sectors.
‘Faster price growth was recorded in manufacturing, construction, motor vehicle trade and retail, as well as transportation and storage. At the same time, prices in services and wholesale trade rose less than in July. Current prices fell in electricity and water supply, mining and agriculture,’ the Central Bank’s monitoring report said.
Russian companies still consider lending conditions tight, although their assessments improved slightly in August, according to the Central Bank’s monitoring. The regulator noted, however, that borrowed funds are not the most popular way for Russian businesses to finance their operations.
‘The Central Bank regularly surveys companies about their capital-raising strategy and their assessment of access to finance. This information has been collected every six months since 2021 as part of the company monitoring programme. Over the past three years, borrowed funds were used to finance operations by an average of four in 10 companies surveyed,’ the regulator said.
Large companies make greater use of borrowed funds, with six in 10 respondents in this group using them. Among small and microbusinesses, only a quarter of companies used external financing, the Central Bank said. Borrowing also varies significantly by sector. ‘In the first half of 2026, more than 60% of respondents in agriculture used borrowed funds, compared with only 18% in services,’ the regulator said.
Russian companies used leasing and government funds even less frequently than bank loans.
Experts believe the improvement in business sentiment in August is justified, but say it is too early to speak of a full turnaround in business activity.
‘The improvement is so far largely linked to business expectations, while assessments of current conditions remain weak. The latest data therefore point more to the first signs of stabilisation and cautious business optimism than to a sustained recovery in business activity already under way,’ said Vladimir Chernov, an analyst at Freedom Global.
The improvement in sentiment is being driven more by expectations than by actual developments, said Dmitry Tselishchev, managing director at Rikom-Trust.
‘Almost all sectors are reporting expectations of possible demand stabilisation, while some, such as oil and gas, are also seeing prospects for higher margins. In the medium term, there are also hopes for cautious monetary easing, which is supporting optimism about a resumption of lending and access to investment. However, companies’ price expectations are still rising, which limits optimism and means the overall situation can be viewed as a correction following July,’ he said.
Vasily Kutin, director of analytics at Ingo Bank, said there was reason for cautious optimism.
‘Sentiment did improve somewhat after the July downturn. But it is important not to draw overly optimistic conclusions immediately. Nevertheless, the survey results reflect a gradual improvement in the macroeconomic environment in the second quarter of 2026. According to Rosstat’s preliminary estimate, GDP grew by 1.3% year on year in the first half of the year. This is particularly notable when compared to the first quarter, when GDP contracted by 0.2%. Consumer demand, the main growth driver, also increased: retail turnover rose by 7.2% and food-service turnover by 6.2%. People became more active in their spending, including on hotels, entertainment and fuel. There was also positive momentum in the real sector. Manufacturing grew by about 2%. Sectors linked to government orders, including machinery, pharmaceuticals and food production, were particularly active,’ he said.
‘The main improvement has been in companies’ expectations for future output and demand, while current demand assessments continue to deteriorate. This creates a certain gap between what businesses expect in the coming months and what is actually happening now,’ said Vitaly Lavrinovich, a business analyst at PRoud.365.
‘One factor behind the more positive expectations may have been the reduction in the key rate to 14%, as businesses expect further easing of monetary conditions and a gradual reduction in borrowing costs. However, there are still few grounds for expecting a significant acceleration in the economy. Particularly telling is the uneven distribution of improved sentiment across businesses. The business climate indicator for large companies was in positive territory in August at 3.1 points, while it stood at –1.6 points for medium-sized companies and fell to –4.5 points for small and microbusinesses. This shows that small businesses continue to feel the high cost of financing, weak demand and rising costs much more acutely. Another warning sign is the rise in companies’ price expectations, which have increased for the second consecutive month,’ he said
