Russian Union of Industrialists and Entrepreneurs (RSPP) Records Sharp Improvement in Business Climate in April Survey
Russia's business confidence rebounds as interest rates fall to 14.5%
The Russian Union of Industrialists and Entrepreneurs (RSPP) has reported a significant improvement in business sentiment based on its April survey, according to data published on the organization's website. Experts suggest that businesses are beginning to adapt to higher fiscal pressures, while disinflation trends and a gradual reduction in the Central Bank's key rate have further bolstered optimism.
The share of respondents who believed the business climate had deteriorated fell by 13.3 percentage points, shifting toward neutral assessments, the RSPP noted. The index of personal business assessments rose by 5.7 points to 37.9—rebounding from a sharp decline to 32.2 in March, down from 38.2 in February.
The composite Business Environment Index reached 46.2 points, up 2.4 points from March. In April, only 44% of surveyed companies reported rising procurement costs, compared to 54.2% in March. Meanwhile, the proportion of firms raising prices also declined—from 23.4% in March to 13.5% in April.
However, demand conditions remain strained, the RSPP emphasized. While 29.2% of companies reported a further drop in industry demand in April, just 14.6% observed an increase (down from 19.1% in March). About 56.2% of businesses saw no change in market conditions.
March was a month of peak stress for businesses, said Andrei Glushkin, a member of the Moscow regional council of Delovaya Rossiya (Business Russia). Companies were still adjusting to the VAT hike from 20% to 22%, he noted. President Vladimir Putin has expressed hope that the increase will be temporary, framing it as a step toward "reducing the tax burden in the future." The change also expanded the pool of VAT payers: as of this year, firms with annual revenues exceeding 20 million rubles in 2025 must pay the tax, down from the previous threshold of 60 million rubles. The Central Bank had previously cited the VAT increase as a pro-inflationary factor that could temporarily intensify inflationary pressures.
On April 24, the Bank of Russia's board cut the key rate by 50 basis points—from 15% to 14.5%—marking the eighth consecutive reduction.
