Russian economic meltdown as fishing industry faces soaring debts | World | News
Russia’s fishing industry is facing massive cumulative debts of more than £8 billion, as the country’s economic crisis intensifies.
Businesses and consumers have been hit by a double whammy of soaring inflation and high interest rates.
Russia‘s Central Bank was forced to hike interest rates last year to a record high of 21% in a desperate attempt to bring down spiralling inflation.
This has seriously impacted businesses, many of whom now face crippling costs to service loan debts.
The future now looks increasingly bleak, as bank officials refuse to rule out more interest rate hikes.
The fishing industry has become the latest sector to feel the chilly winds of the gathering economic storm.
A senior industry official told Interfax that more than 40% of the country’s seafood businesses were operating at a loss.
German Zverev, president of the All-Russian Fishery Association (VARPE), also warned that the industry is bracing for a further decline in profits in 2025 due to rising costs.
According to data from Russia‘s statistical agency Rosstat, the fishing sector ranked as among the worst financial performers in 2024.
Figures show that for the first half of 2024, the combined profit of fishing, processing and aquaculture companies in Russiaplummeted by 14.2% to RUB 60.2 billion (£524 million).
The Russian Association of Fishing Fleet Shipowners says high interest rates have had a major impact on profitability.
Companies have no choice but to take out increasingly expensive commercial loans to invest in new fleets and processing facilities in order to meet agreed government quotas.
Meanwhile, Western sanctions are leading to a shortage of life-saving medicines, according to an investigation by the Russian news outlet Novaya Gazeta Europe.
Pharmacies ran out of 134 medicines during 2024, which included 20 cancer drugs and five types of antibiotics.
Drugs used to treat HIV, malaria and tuberculosis also became unavailable, as Russians struggle to access proper treatments.
The shortage of drugs has led to a thriving black-market trade, with almost half of the medicines no longer available in shops on sale on the Telegram messaging app.
