Shokhin predicted reductions in Russian companies in 2027

Russian companies in 2027 may begin to reduce staff due to lower demand and lack of positive expectations about economic dynamics. This was stated to journalists by the President of the Russian Union of Industrialists and Entrepreneurs (RSPP) and business ombudsman Alexander Shokhin, reports “Interfax”.

Many businesses have so far maintained their workforce, shifting them to three- and four-day workweeks in anticipation of economic recovery, he said. However, in the absence of positive prospects, companies may move to reduce staff.

“When such forecasts for 2027 are clearly not very optimistic, then it makes no sense to keep [employees] economically, and only social remains,” Shokhin explained. He predicted an increase in unemployment in Russia next year.

According to him, with the preservation of tight monetary policy and a decrease in the budget impulse, the growth of the Russian economy in 2027 “may go into the red, at least close to zero.”.

Shokhin also said he does not expect a key rate cut until at least February 2027. In his opinion, the Bank of Russia will take a pause, including to assess the consequences of tax changes planned for next year.

"Until February, in fact, I personally don't expect any business gifts from the central bank in the form of a rate cut," he said.

Shokhin added that large enterprises, which are the main employers in individual cities, will need support. In particular, he suggested considering deferrals and installments on tax payments, as well as individual schedules for their repayment.

Bank of Russia Governor Elvira Nabiullina said earlier this week that she expects a gradual acceleration of economic growth. By the end of 2026, GDP, according to her forecast, will increase by about 1%.

Among the drivers of the economy, she called mechanical engineering, including the defense industry, an increase in income and consumption of the population, as well as the expansion of retail trade.

At the meeting on October 23, the Bank of Russia kept the key rate at 14% per annum. The regulator raised the inflation forecast for 2026 to 7.1-7.6%.

President Vladimir Putin also predicted GDP growth for the year by about 1%. According to him, unemployment is 2.3%, and real wages for the first half of the year increased by 6.5%. Retail sales for the seven months increased by 5.4%.

In June, Putin explained that the authorities deliberately went to cool the economy to contain inflation. We do not want inflation, hyperinflation to be 60-70%, as in some countries. We are fighting for the health of the Russian economy as a whole, the head of state said.

In July, the President also said that the Russian economic system is stable, although there are risks of accelerating inflation.

Unlike other developed economies in the world, Russia continues to hold fourth place in the world after China, the United States and India in purchasing power parity and first in Europe. In terms of economic growth compared to the European Union, we are also ahead. But of course I'd like more. But there are risks of rising inflation and corresponding consequences, he said.