world
Half a Million Russians Declare Bankruptcy as GDP Forecast Cut to 0.4 Percent
Al Jazeera reported that 500,000 Russians filed for bankruptcy in 2025 amid rising bad loans and a slowing economy tied to the war in Ukraine. Russia's Ministry of Economic Development lowered its 2026 GDP growth projection. Experts assess that a full banking crisis remains unlikely despite the strains.
Jul 8, 4:41 AM·2m read2 sources
Al JazeeraAudio version
Tap play to generate a narrated version.
Developing·Limited corroboration so far. This page will refresh as more sources emerge.
Half a million Russians declared bankruptcy in 2025, a nearly one-third increase from the prior year, as the country’s banks extended more risky loans to support the war effort in Ukraine, Al Jazeera reported. Russia’s Ministry of Economic Development cut its 2026 GDP growth forecast to 0.4 percent from 1.3 percent. Growth had already slowed to 1 percent in 2025.
Overdue corporate loans reached about 7 trillion roubles ($91 billion), or 3 percent of Russia’s $2.65 trillion GDP, according to Vladislav Inozemtsev of Chatham House. More than half of those overdue corporate loans went to defense-industry enterprises or companies connected to state defense. Overdue loans to individuals totaled another 1.
Ten percent of corporate loans are now doubtful, the European intelligence report seen by Reuters estimated. State-backed credit programs led more than 13 million Russians to hold three or more bank loans simultaneously. Members of the Russian National Guard stood outside the Central Bank headquarters in Moscow on April 24, 2026, during a key rate-setting meeting.
Russian banks recorded combined profits of $80 billion to $90 billion in 2024 and 2025. In the first five months of 2026, sector net profit exceeded 1.9 trillion roubles ($24.8 billion), with a full-year forecast of 3. A Gallup poll found that 60 percent of Russians believe their economic conditions are worsening, 56 percent say living standards are deteriorating, and 58 percent consider it a bad time to find a job locally.
Inozemtsev said overdue defense-related loans will be repaid or supported by the state, while reserves cover potential individual defaults. He noted the concentrated structure of large, supervised banks reduces the risk of a broad crisis. “The situation creates the illusion of a dynamic economy that, in reality, conceals an explosive situation which an economic shock, such as an ambitious package of sanctions against banks, could trigger,” the European intelligence report stated.
