Survey indicates Western businesses in no hurry to leave Russia

(MENAFN) A majority of Western businesses still operating in Russia have no plans to exit the market, according to a recent survey by the Association of European Businesses (AEB). Despite ongoing sanctions and associated difficulties, many companies remain committed to their operations in the country, citing long-term market potential.

The AEB’s annual poll, released Monday, found that 67% of surveyed firms are not considering a withdrawal from Russia—slightly higher than the 66% reported in the previous year. Respondents indicated that their Russian operations are vital to their global strategies.

Key motivations for staying include opportunities for market share growth (50%), business expansion (39%), and access to new customer segments (32%). Over half of the companies (56%) confirmed they are continuing investment projects, attracted by Russia’s market size and development prospects.

While immediate business confidence has weakened, longer-term outlooks have improved significantly. This year, 82% of respondents anticipate substantial growth over the next decade, up from 66% in 2023.

Most firms reported having adapted to the sanctions environment but still face notable hurdles, such as payment issues, reputational concerns, and foreign partners’ reluctance to engage with Russia-affiliated entities. Around 87% said they were adversely affected by Western sanctions and Russian countermeasures, including banking restrictions, asset freezes, export-import limitations, and disconnection from SWIFT. Additionally, 71% of businesses do not foresee any easing of sanctions in 2025.

Despite these headwinds, 59% of companies expect turnover growth in the next three years—an increase from 53% the year prior. The AEB’s Business Climate Index has risen to 127 points out of 200, continuing its recovery from a low of 80 points in 2022.

AEB CEO Tadzio Schilling stated that the results indicate foreign businesses have achieved a sense of balance in Russia’s new economic environment. He noted that firms have adjusted their models, developed alternative supply chains, and learned to operate under ongoing restrictions. The survey reflects cautious optimism among businesses, Schilling added.

The AEB represents over 380 firms from the EU, European Free Trade Association, and other nations doing business in Russia. The survey was conducted from April to May and included responses from senior executives at 100 member companies across various industries.

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