Business is going right down the drain: every tenth company in Russia is on the verge of bankruptcy
More than the half of entrepreneurs will be able to stay afloat for another maximum one to three months. Every tenth Russian company is on the verge of ruin, or runs the risk of being in this position if the restrictions are not completely lifted in two weeks.
Only 15% of the entrepreneurs surveyed indicated that they could hold out for another six months and another quarter of the companies said that the restrictions did not threaten their business, according to a survey by EY.
Among small and medium-sized enterprises, statistics are even more deplorable: by the end of April, one out of five entrepreneurs announced their intention to close, and only 7% of large companies in the country were on the brink of ruin. Almost 80% of large companies with state participation said that the current economic crisis will not lead to the bankruptcy of their enterprises.
The vast majority of entrepreneurs (almost 80%) say that self-isolation affected the industry in which they work. A third of businessmen noted a decrease in revenue of more than half. The same number said that revenue decreased slightly - no more than 20%. And only 6% speak of revenue growth during this period. Mostly they work in the trading of essential goods.
The survey involved 230 entrepreneurs across the country. More than half of the respondents indicated that they would need at least a year to recover to the indicators of the pre-coronavirus period. Another third believes that restoration will take from six months to a year. The rest say they will cope with the effects of the crisis faster.
Large companies are more optimistic about the pace of recovery from the crisis than small businesses. 38% of entrepreneurs said they reduced operating costs for the company, a third said they were able to achieve lower rental costs, 26% of entrepreneurs transferred workers to part-time work, 24% agreed with suppliers on more favorable conditions, every fifth entrepreneur reduced employee salaries .
Earlier, the Ministry of Economic Development announced that the business activity of the Russian business on self-isolation decreased by only a third. At the same time, the Minister of Economic Development Maxim Reshetnikov himself stated that daily business losses due to self-isolation exceed 100 billion. Business Ombudsman Boris Titov predicted The Russian economy will roll back to the mid-90s if self-isolation drags on and the authorities do not support entrepreneurs. There were pitfalls in each of the measures taken to support the business. Unemployment continues to grow in the country: in two months of work, about 200 thousand Russians lost their jobs. In the most pessimistic scenario, one in ten may be left without work.