Russian Railways Slashes Spending Amid Economic Pressure

Russian Railways plans to cut its spending by 40% in the coming year due to high interest rates, impacting both the company and its supply chain. The company's investment for 2024 stands at 1.275 trillion roubles, amid efforts to bolster infrastructure and boost fossil fuel exports to Asia.

Russian Railways, an integral part of Russia's industrial framework, is planning a significant reduction in its budget for next year, slashing it by approximately 40% from 2024 levels. This comes as the firm grapples with the challenges posed by Russia's elevated interest rates, as reported by Interfax following statements from Tatiana Orlova, the company's finance chief.

The economic strain is evident in the company's projected interest payments, which could soar to $7 billion in the coming year, marking an increase of about $4 billion. Such financial pressures have prompted Russian Railways to reassess its spending strategy, a move expected to reverberate through its extensive network of suppliers.

The 2024 investment agenda for Russian Railways is set at 1.275 trillion roubles ($12.50 billion), focusing on asset acquisition and infrastructure enhancements. This includes the expansion of pivotal railroads like the BAM and Trans-Siberian lines, critical to Moscow's objective of increasing fossil fuel exports to Asia.

(With inputs from agencies.)