Russia's Small and Medium Business Activity Index (RSBI) increased to an all-time high in May, surpassing 2018's record highs, Promsvyazbank's press service said.

The respondents were owners and top managers of more than 1.8 thousand companies in the small and medium-sized business (SMB) sector from all regions of the country.

Business activity of such companies is actively growing and this is confirmed by the RSBI index, which reached a new historic high of 54.6 points in May, while exceeding the 2018 record by one and a half points.

The main reason for the record high business activity lies in the high investment dynamics shown by all business segments and all business areas, said Kirill Tikhonov, Vice President and Head of the SME Products and Technology Directorate at Promsvyazbank.

He explained that for the first time since the start of the pandemic, micro and small businesses began to actively invest in business development. "High sales expectations and investment growth in May indicate a positive business mood for the coming months," the bank representative said.

The partial restrictions of mid-June in general, according to the expert, will not significantly affect entrepreneurs, as most of them have already adapted to the conduct of work in a pandemic environment.

As a result, three of the four components were responsible for the index's growth, with sales entering the growth zone for the first time in two years and HR and investment reaching new historic highs. At the same time, the credit component decreased slightly, but continues to remain at high levels.

According to Alexander Kalinin, President of Opora Rossii, the decline in the credit component is expected to continue for at least another month or even longer.

He said that the Central Bank of Russia raised its key rate to 5.5%, indicating that the cost of both preferential and conventional loans for small businesses will continue to rise. And given the fact that the situation with the spread of covid is worsening, measures should be taken now to maintain the current growth in small business activity, Kalinin concluded.

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Author: Ksenia Gustova