Russia’s economy is showing more signs of strain as some of its biggest exporters reduce rail cargo shipments.
Major firms, including Rusal, Gazpromneft, Severstal, and others, are preparing to reduce the volume of oil, metals, and various other goods they ship by rail in 2025, according to a Russian Railways report.
This drop in demand reflects the growing pressure on Russia’s war-hit economy.
Russian Railways is to respond by cutting an extra 32.5 billion roubles (about $408 million) from its 2025 investment budget, bringing the total spending down to 858.4 billion roubles.
This follows a 40% investment drop in 2024, mostly as a result of higher rates of borrowing and inferior performance in several important sectors.
Industry Affected by Sanctions, High Rates, and Weak Demand
Construction and development of infrastructure have been slowed down by stricter lending requirements.
Trade is suffering as a result of restrictions on the export of lumber, fertilizers, aluminum, and oil.
Oil firms, steel manufacturers, and exporters of aluminum are reducing their shipments as a result, which is indicative of a decline in industrial demand throughout Russia.
Trading with China has decreased by 7.5% this year.
To further reduce cargo quantities, leading steelmakers including MMK, NLMK, TMK, and Evraz are all lowering their output.
The top producer of aluminum, Rusal, is reducing output by 250,000 tons as a result of rising raw material prices.
Particularly severely impacted is the iron and steel sector, which accounts for around 5% of Russia’s GDP. Both output and export revenues have decreased, following a trend from 2024 into this year as sanctions make it more difficult to access international markets.
A Bleak Outlook for Growth
The situation is made worse by Ukrainian drone strikes on Russian oil facilities—described in the document as “third-party interference.”
These combined factors are slowing industrial activity and weakening export routes. As Russia continues to cut infrastructure investments and faces increasing isolation from global trade, its long-term economic stability looks more fragile than ever.
