For a long time, the Russian government downplayed the impact of Western sanctions on the country’s economy. However, a recent report shows that Russia’s economy is on the decline.

The economic sanctions imposed by the West on the Kremlin since March are hitting the Russian economy harder than previously assumed. According to a report by the FinExpertiza auditing network, a total of 113,000 Russian companies went bankrupt between March and June, reports the Russian online magazine Even Russia’s President Vladimir Putin surprisingly spoke of “great challenges” on Monday.

According to FinExpertiza’s report, 113,500 companies across the country went out of business between spring and summer – a 17.5 percent increase compared to the same period last year.

However, Elena Trubnikova, head of FinExpertizia, told that not all business closures are due to the Western sanctions: “Economic sanctions and falling demand will certainly impact business demographics in 2022, but the process of business liquidation extends into the Usually over a longer period of time and does not happen overnight. At present, most business closures are not primarily due to a decline in entrepreneurial activity, but to the cleaning up of registers by the tax authorities of shell companies and non-functioning companies.”

According to information from the consulting network, almost 16,500 companies were directly deregistered from business operations by their owners, and around 2,500 companies are said to have gone bankrupt.

But Russia’s crumbling economy is worrying even the otherwise offensive head of the Kremlin. As Putin admitted to the Interfax news agency on Monday, his country faces a “colossal amount of difficulties”. At the same time, however, he emphasized that one is looking for solutions for one’s own economy. “Isolating Russia from the rest of the world with a fence” is not possible in the long term, Putin said.