Civilian sectors of Russian industry under pressure from economic slowdown, declining demand, additional subsidies needed - industry and trade minister

MOSCOW. May 14 (Interfax) - The Russian manufacturing industry is increasingly feeling the consequences of economic cooling; against this backdrop, the Industry and Trade Ministry is looking for additional sources of subsidies for civilian industries, Industry and Trade Minister Anton Alikhanov said at the congress of the Russian Union of Machine Builders.

"Civilian sectors have been increasingly feeling the systemic cooling of the economy in recent months. We see that demand from consumer spheres is falling, and enterprises are seeing underutilized capacities," Alikhanov said.

Amid expensive working capital and investment loans, enterprises' costs of servicing loans have increased, and overdue debt is growing, primarily to suppliers, he said.

"Given this, we are now working out additional sources to increase subsidies for industry," he said.

In May, the Economic Development Ministry lowered its forecast for industrial production growth in Russia in 2026 to 0.6%, from 2.3% in the September version of its macroeconomic forecast. The ministry forecasts industrial production growth of 2.1% in 2027 (lowered from 3.1%), 2.4% in 2028 (lowered from 2.8%), and 2.5% in 2029.

Growth in manufacturing in 2026 is expected at 1.0% (the forecast was lowered from 2.9%), 2.8% in 2027 (down from 4.0%), 3.1% in 2028 (down from 3.6%) and 3.7% in 2029.

As reported, according to Rosstat estimates, industrial production grew 0.3% year-on-year in January-March 2026, while manufacturing saw a decline of 0.7%.

Industrial production in Russia grew 1.3% in 2025, including growth in the manufacturing industry of 3.6%.