AMSTERDAM, September 18, 2014 /PRNewswire/ --
Russia is currently experiencing a slowdown in economic growth, and the situation is most likely to deteriorate further as a result of the newly imposed sanctions. Atradius is observing an impact across all sectors in the form of decreasing domestic demand, a weaker rouble exchange rate, a rise in inflation, limited access to external financing and international capital outflow.
Exporters to Russia could experience an increase in payment delays and defaults. Some sectors are expected to be more affected than others. Russia's sanctions on imports of food and agricultural products will hit the food sector, in particular the fish, meat and dairy subsectors, with a negative impact on the whole value chain. Sectors dependent on consumer demand, such as the consumer durables and consumer electronics sectors are also expected to see further slowdown.
EU and US sanctions on financing are expected to put a toll on Russian businesses dependent on financing. The oil and gas industry is still performing well thanks to high commodity prices, but businesses in other strategic sectors such as metals and mining are suffering, and may not be able to refinance their large debts. While the Russian government is ready to provide financial support, its reserves, though ample, are limited.
Some sectors, however, such as the pharmaceuticals sector, are expected to be less impacted and local agricultural production could even benefit from restrictions on food imports. In case of price controls, however, business profits may be hit with higher costs that cannot be transferred to consumers in such cases.
A more in-depth review of the Russian business environment is available in the September 2014 Atradius Country Report on Russia.
About Atradius
The Atradius Group provides trade credit insurance, surety and collections services worldwide. With a presence through 160 offices in 50 countries, Atradius has access to credit information on 100 million companies worldwide. Its products help protect companies throughout the world from payment risks associated with selling products and services on credit.
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