Supporting small and medium-sized businesses has been among Vladimir Putin’s declared priorities even in wartime, and framed as a backbone of resilience in the face of Western sanctions.

But the Russian state has been unable to shield the sector from the war’s impact, and there have been several shocks to businesses since the start of the year.

VAT went up from 20% to 22% in January, with extra funding earmarked for defence, and tax breaks for some businesses were scrapped.

Some 209,000 small and medium-sized companies closed in the first quarter of 2026, according to business intelligence platform Kontur.Fokus. That is 9% more than in the first three months of 2025.

Widespread internet shutdowns and a crackdown on popular messaging apps led to further troubles, and Moscow businesses lost tens of millions of dollars in one week in March, according to some estimates.

And then came the fuel crisis, triggered by Ukrainian strikes on oil depots, refineries and supply routes.

“There are already a lot of nails, and they keep hammering them in. Is [the attack on Wildberries warehouses] another nail in the coffin? Well, yes, of course,” Prof Ruben Eniklopov of Pompeu Fabra University in Barcelona told the BBC.

Small businesses in Russia have proved resilient in the past, but inflation is high, the budget deficit is widening, and oil and gas revenues are 23% lower than in the first six months of last year.

Russia has vast financial reserves, accumulated in peacetime, but its war in Ukraine is increasingly swallowing resources, starving the civilian economy of growth.

Additional reporting by Olga Shamina.