Top banker points to ‘shameful’ imbalance in Russia’s GDP

The country’s small- and medium-sized businesses make up just one-fifth of the economy

The head of Sber, Russia’s largest state-owned lender, has called the small proportion of small- and medium-sized enterprises (SMEs) in the Russian economy “shameful.”

Small businesses account for just one-fifth of the country’s gross domestic product (GDP) and “it’s a shame,” Herman Gref said at a meeting of Opora Rossii, a non-governmental organization that represents the interests of SMEs.

He cited the example of China, where SMEs account for between 60% and 70% of the economy, adding that in the US and Finland small businesses account for around 60% of GDP, while this figure is over 70% in Italy.

In 2021, the contribution of SMEs to Russia’s GDP was 20.3%, according to the national statistics agency Rosstat. It’s expected that the output of smaller companies in the Russian economy will grow and reach 32.5% by 2024 under a series of national schemes designed to support SMEs.

READ MORE: Russia has lowest inflation in Europe – PM

Russia defines small- and medium-sized companies as businesses that employ fewer than 250 people, have annual revenues of under two billion rubles ($24.9 million), and meet certain ownership and corporate governance rules.

Experts say small businesses in Russia are more exposed to economic headwinds such as sluggish consumer demand and inflation, because they predominantly operate in the retail sector of the economy and rarely export to other countries.

Find more stories on economy and finance in TROIB business