Business climate index declines to 1.7 in May
The Bank of Russia (CBR)'s Business Climate Index (BCI) decreased to 1.7 in May, driven by more moderate output and demand expectations. Companies' price expectations declined for the fourth consecutive month, falling below 2024–2025 levels.
Expectations moderate, inflation cools
In May, the CBR's Business Climate Index (BCI) decreased to 1.7 points, down from 2.1 points in April.
This moderation reflects more subdued output and demand expectations among companies.
The BCI's dynamics continue to show significant variation across individual industries, with transportation, logistics, and manufacturing contributing most to the decline, while agriculture maintained the highest indicator value.
Companies' price expectations, measured as the balance of responses, declined for the fourth consecutive month in May, dropping below the levels observed in 2024–2025.
Furthermore, the average three-month-ahead inflation expected by businesses, in annualised terms, significantly decreased to 3.4 percent in May, compared to 4.5 percent in the previous month.
This indicates a notable cooling of inflationary pressures perceived by businesses.
Investment slows, labor market eases
Investment activity among businesses dropped in the first quarter of 2026.
Expectations for the second quarter of 2026 suggest that growth in investment will be the most subdued since the fourth quarter of 2019, reflecting a cautious outlook.
Concurrently, staff shortages continued their gradual decrease in Q1 2026, though staffing levels remain extremely low compared to the period before 2022.
Companies' recruitment expectations for Q2 2026 were the most moderate since Q3 2020, even as the overall balance of responses stayed positive.
The CBR uses these survey results, gathered from approximately 15,500 non-financial enterprises, to inform monetary policy decisions, analyze inflation, and identify economic trends.
Cooling economy, mixed signals
The broad-based moderation in business expectations and activity signals a cooling economy, which could be viewed as a positive development for disinflationary efforts.
However, the significant drop in investment and subdued recruitment outlook suggest a challenging environment for growth and employment in the near term.
This complex picture presents a dilemma for policymakers, balancing the need to curb inflation with supporting economic dynamism.
Source: 'Monitoring of Businesses' No. 5 (49) • May 2026
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