Russia Cuts Support for Small and Medium Businesses Amid War Spending

Amidst the rapid reorientation of Russian state finances toward the war against Ukraine, the authorities are significantly reducing instruments to support small and medium-sized businesses, The Gaze reports, citing the Foreign Intelligence Service of Ukraine.

In the first half of 2025, state support for small and medium-sized businesses in Russia fell by almost half compared to the same period last year.

The main reasons were a reduction in preferential lending, “budget optimization,” and a shift to selective assistance only for entrepreneurs in key industries—manufacturing, logistics, IT, and tourism. At the same time, the number of recipients of state support decreased by 22%.

Instead, the Kremlin continues to increase spending on the war against Ukraine, which has become the main priority of the Russian budget.

“For the Russian authorities, financing aggression is more important than supporting their own citizens and developing the economy,” the report says.

According to forecasts, in 2025–2030, 330 billion rubles are planned to be allocated to support small and medium-sized businesses, which is 20% less than in the previous six years.

It is reported that this could lead to rising unemployment and a slowdown in economic development, as small and medium-sized businesses provide about 29 million jobs in the country.

As The Gaze reported earlier, the Central Bank of Russia has issued a warning about the country's future economic development, noting that economic growth could stall as early as the end of 2025 due to a number of internal and external challenges.