In Russia, financial difficulties reached regions with powerful defense enterprises - Bloomberg

Regions of the aggressor country of russia, which benefited from a significant increase in spending on the war against Ukraine, are now experiencing difficulties and are forced to turn to Moscow for help. This is stated in the material of the Bloomberg agency.

The agency cites as an example the Nizhny Novgorod Oblast of the russian federation, which since Soviet times has been an important industrial center with a big number of large enterprises. Currently, the economic situation in the region is causing "serious concern."

A letter from the local association of industrialists to a high-ranking official in the region, which journalists have reviewed, indicates that enterprises in the Nizhny Novgorod Oblast are facing a sharp drop in investment and profits, as well as a decrease in the number of orders. The association called on the regional authorities to convey their concerns to russian dictator vladimir putin.

The payment delays could be a sign that financial difficulties have reached regions with a powerful military-industrial complex (MIC). Bloomberg emphasizes that this is happening at a time when state defense spending has increased by about 30% and is likely to remain at the same level in 2026.

The documents, which were attached to the letter from the industrialists' association and analyzed by Bloomberg, say that about 20,000 people could be unemployed in the region in the second half of this year. Several large enterprises, including those considered systemically important to the state, have already reduced working hours in order to reduce costs.

The worsening situation contrasts sharply with last year, when, according to official data, there was practically no unemployment in the Nizhny Novgorod Oblast and average wages rose sharply. This reflects broader difficulties in the russian economy, which has "cooled down" after the introduction of record-high interest rates.

A survey of more than 10,000 companies across russia, published by the russian Central Bank in February, found that businesses across the country are reporting weaker demand and tighter financial conditions, and are cautious about investing and hiring. Some of the country's largest companies are asking Moscow for help to ease the pressure from high borrowing costs and weak demand.

Bloomberg reports that many of russia's 80 regions are facing growing budget deficits, which will force them to rely even more on financing from Moscow. The regions' combined budget deficit in 2025 has increased to RUB 1.48 trillion, more than three times the deficit in 2024.

As Ukrainian News Agency earlier reported, on February 24, the Center for Research on Energy and Clean Air (CREA) published a report stating that in 2025, russia's revenues from the sale of fossil fuels fell by 27% compared to the period before the full-scale invasion of Ukraine.

As we will recall, in early February, Reuters reported, citing sources, that the russian government was considering suspending the implementation of projects that were planned to be financed from the National Welfare Fund.