Helsingin Sanomat: Moscow entrepreneurs in serious trouble

Finland's major newspaper Helsingin Sanomat reports that the departure of Western companies from Russia has not brought expected competitive advantages to local firms. High inflation, tax increases, and elevated interest rates are squeezing Moscow entrepreneurs into an increasingly difficult situation.

According to Finland's largest daily newspaper Helsingin Sanomat, the situation for businesses operating in Moscow has become extremely challenging. Although Western companies left the Russian market following the 2022 full-scale invasion of Ukraine, this has not delivered the anticipated competitive advantage to local firms.

Instead, Moscow entrepreneurs are facing multiple economic problems simultaneously. Rapidly growing inflation erodes profits, tax increases burden corporate balance sheets, and high interest rates make borrowing and investment extremely expensive.

High interest rates are a particularly acute problem — the Central Bank of Russia has maintained its base rate at record levels to curb inflation, but this in turn has seriously hampered business development and day-to-day operations. Many entrepreneurs have consequently had to shelve their expansion plans.

Helsingin Sanomat notes that the initial hope stemming from Western sanctions and corporate departures — that the Russian economy would collapse rapidly — has not fully materialised, yet Russian entrepreneurs themselves are suffering under significant structural problems that are far removed from a favourable business environment.