{"id":729120,"date":"2026-01-29T18:30:17","date_gmt":"2026-01-29T18:30:17","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/729120\/"},"modified":"2026-01-29T18:30:17","modified_gmt":"2026-01-29T18:30:17","slug":"russian-economy-meltdown-as-railway-company-collapsing-into-bankruptcy-32bn-in-debt-world-news","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/729120\/","title":{"rendered":"Russian economy meltdown as railway company collapsing into ‘bankruptcy’ – \u00a332bn in debt | World | News"},"content":{"rendered":"

\"Electric<\/p>\n

Russia’s economy is in sharp decline (Image: Getty)<\/p>\n

Russia\u2019s economy is slowing sharply, with the highest interest rates in two decades driving up debt levels as the world\u2019s largest railway network edges closer to bankruptcy. Once a major economic engine, Russian Railways<\/a> (RZD) is an integral part of the country\u2019s lives; however, it is plunging deeper and deeper into financial trouble.\u00a0<\/a><\/p>\n

Despite moving 1.31 billion passengers a year across 11 time zones, the country\u2019s biggest commercial employer is struggling to stay on track, as pressures push the company toward a critical turning point. RZD\u2019s debt has surged to nearly four trillion rubles (\u00a332billion) in debt meaning the company is in its deepest crisis in 16 years. This has prompted state-backed restructuring, deep investment cuts, and the prospect of bailouts to prevent a default.<\/p>\n

\"Retro<\/p>\n

Russian Railways is in its deepest crisis in 16 years (Image: Getty)<\/p>\n

Read more:<\/strong> 80 soldiers wiped out in brutal Russian assault as Putin turns screw on Ukraine <\/a><\/p>\n

Read more:<\/strong> Vladimir Putin’s spies to ramp up attacks in UK as part of ‘undeclared war’ <\/a><\/p>\n

The railway accounts for around 2.5% of Russia<\/a>\u2019s GDP. Russian Railways is widely believed to be an entity that is \u201ctoo big to fail\u201d.<\/p>\n

However, analysts warn that without structural reforms and stabilisation of the economic environment, the company will continue to depend on state financial injections.<\/p>\n

\u201cAt the current rate of decline, the Russian railway industry will only survive as long as the state can support it through forced loans, capital injections, or debt write-offs,\u201d said Jeff Hawn, a researcher at the London School of Economics, quoted by Europa Liber\u0103.<\/p>\n

The full-scale war in Ukraine<\/a> has been the primary driver of its difficulties. RZD\u2019s most profitable segment is its freight transportation, with railways also being the main transportation for the artery.<\/p>\n

Rail network utilisation fell sharply in the immediate aftermath of the full-scale war, with cargo volumes and revenues dropping.<\/p>\n

In 2025, freight volumes plunged by 9.4% compared with 2024. As the war moves toward its fifth year, the company\u2019s struggles have become a reflection of Russia<\/a>\u2019s broader economic troubles.<\/p>\n

\"Railway<\/p>\n

Russian Railways is plunging deeper and deeper into financial trouble (Image: Getty)<\/p>\n

“This crisis at Russian Railways is one of the factors [resulting from] accelerating inflation in the Russian economy,” said Igor Lipsits, a Russian economist who now lives outside of the country.<\/p>\n

“What does this mean? Revenues are lower, tariffs are higher, prices are rising, inflation is accelerating, and people are getting poorer,” he told Current Time. “This is what we are seeing in the Russian Railways crisis.”<\/p>\n

The state aims to avert a deepening debt crisis that could jeopardise the company\u2019s recovery by cutting investment, tightening costs, and shifting part of the debt burden onto banks.<\/p>\n

This year, some employees will also see their pay cut as they are transferred from Moscow to other regions, and wages are planned to increase by just 0.1% against 10% inflation.<\/p>\n

The Russian government is debating using the National Welfare Fund, restructuring loans with banks like VTB, and potentially selling its subsidiary, the Federal Freight Company.<\/p>\n","protected":false},"excerpt":{"rendered":"Russia’s economy is in sharp decline (Image: Getty) Russia\u2019s economy is slowing sharply, with the highest interest rates…\n","protected":false},"author":2,"featured_media":729121,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3090],"tags":[51,2825,62389,64063,1700,7856,7661,55481,16,216807,15],"class_list":{"0":"post-729120","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-debt","10":"tag-debt-restructuring","11":"tag-economic-crisis","12":"tag-economy","13":"tag-railway","14":"tag-russia-ukraine-war","15":"tag-russian-railways","16":"tag-uk","17":"tag-ukraine-war-impact","18":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115979814600716949","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/729120","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=729120"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/729120\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/729121"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=729120"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=729120"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=729120"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}