Third in the Volga Federal District: Tatarstan is regaining its leading position in industrial production

Manufacturing production grew by 16% in five months

Republican production continues to increase its turnover — for five months of 2025, the industrial production index (IPI) amounted to 108.6%, IPI in the manufacturing industry — 116%, in the extraction of minerals — 96.9%.

Compared to the results of the first quarter of the year, growth is noticeable — industrial production in Tatarstan for January — March 2025 increased by 6.6%, the manufacturing industry increased by 13.7%, and the extraction of minerals decreased by 4.5%. But the figures look even more impressive against the backdrop of last year's decline in industrial production. In May 2024, industrial production in the republic fell by 2.1% compared to the same month in 2023. Over the five months of 2024, industrial production in Tatarstan grew by only 1.9%, while industrial production growth in Russia was 5.3%.

Positive dynamics in the industry of Tatarstan began in September last year, when industrial production grew by 13.1% compared to the same period last year. And in general, the second half of 2024 turned out to be more successful for the republic.

At the beginning of 2025, growth continued, and in May, industrial production in Tatarstan grew by 16.5% compared to the same period last year.

Over the five months of this year, Tatarstan shipped industrial products, goods and provided services worth 2.3 trillion rubles, 1.8 trillion in manufacturing and 404 billion rubles in mining.

The largest contribution to processing was made by the production of coke and oil products (487.2 billion rubles), chemicals (235 billion rubles), production of motor vehicles, trailers and semi-trailers (167 billion rubles), food products (151.7 billion rubles) and the production of rubber and plastic products (92.8 billion rubles).

For comparison, in the first five months of last year, Tatarstan shipped products, goods and provided services worth 2.1 trillion rubles, 1.5 trillion in manufacturing and 512 billion rubles in mining. Industrial production growth for the first five months of 2024 was 1.9%.

The most dynamic growth in January-May 2025 in Tatarstan was observed in: production of rubber and plastic products (+16%), metallurgical production (+13.1%), production of chemicals and products (+9%), furniture (+8.2%) and machinery and equipment not included in other groups (+7.5%).

A decline was recorded in the production of clothing (-30%), medicines and materials (-18.4%), textiles (-14.1%), finished metal products (-9.5%), electrical equipment (-4.4%) and computers (-1.1%).

Tatarstan is ahead of Moscow and Saint Petersburg in terms of dynamics

Among the regions of Russia, the highest industrial production index is in the Chukotka Autonomous region (126.2%), Kurgan region (119%) and Kaluga region (117.3%). In the Volga Federal District, Tatarstan is ahead of the Ulyanovsk region (111.3%) and the Udmurt Republic (109.6%) in terms of industrial production index. The lowest industrial production index in Russia in the first quarter of 2025 was recorded in North Ossetia (76%), Dagestan (80.4%) and the Republic of Kalmykia (87.9%).

In the Leningrad Region, the industrial production index in the first quarter was 101.5%, in the Nizhny Novgorod Region — 105.3%, in the Moscow Region — 106.8%. In Moscow — 106%, in Saint Petersburg — 106.8%.

In the civilian sector of industry, the situation is more complicated, as domestic demand is falling, and access to credit resources is limited. At the same time, the key rate of the Bank of Russia is twice as high as inflation, so deferred demand is growing, primarily for durable goods.

In addition, the financial stability of enterprises is declining, as evidenced by a significant increase in arrears to the Social Fund. “Over the period from January to March 2025, the debt increased by 22% and amounted to 352 billion rubles, which is higher compared to June 2024 (179 billion rubles)," Shayakhmetov noted.

In the event of an increase in defence, Tatarstan, according to the economist, will be able to maintain the existing dynamics of industrial development. “However, a stagnation scenario is more likely if the Bank of Russia's key rate is significantly higher than the inflation rate, because most enterprises have exhausted their own financial reserves, and replenishing working capital with borrowed funds leads to unprofitable production,” explains Rustem Shayakhmetov.

At the end of 2024, the share of borrowed funds in the capital structure of large and medium-sized Russian enterprises increased to 52%. A year earlier, this figure was 50.5%, and in 2022 it was 48.5%. The debt burden in the manufacturing industry at the end of last year was 59.2%. The dynamics of companies' debt burden reflects the increased dependence of businesses on external financing and a decrease in their financial stability, the economist emphasizes.

Due to the high Bank of Russia rate, businesses are spending more and more on servicing loans, which limits development opportunities. In ferrous metallurgy and mining, debt servicing costs amounted to 21% of profits, in the transport industry — 33% of profits.

According to Rosstat, the total debt of organizations in Tatarstan in May 2025 amounted to 5.02 trillion rubles, in May it increased by 1.2% — growth above inflation. At the same time, overdue debt amounted to 80 billion rubles (1.6% of the total debt), in a month it increased by 13.6%. “This is not critical yet, but it is an alarming signal about the financial condition of enterprises in Tatarstan,” the expert believes.

The losses of enterprises in Tatarstan for the first four months of this year, compared to the same period last year, increased by 2.8 times (101.3 billion rubles), and the balance of profits and losses of enterprises in the republic in January-April of this year decreased by 14.5% than it was a year ago. “The profitability of business in Tatarstan has significantly decreased. Perhaps this was the price to pay for the growth of production in the republic,” the economist does not rule out.

Against the backdrop of the all-Russian dynamics, industry in Tatarstan is growing at an accelerated pace, agrees Vladislav Bukharsky, Junior Director for Sovereign and Regional Ratings at Expert RA.

Russia has seen the sharpest decline since March 2022

“If we compare it with all-Russian statistics, the dynamics of industrial production in Tatarstan this year is significantly ahead. But, probably, this is precisely the effect of the low base of the same period last year, while in Russia as a whole the industrial production base in January-May last year was very high,” Olga Belenkaya, head of the macroeconomic analysis department at FG Finam, agrees with the previous speaker.

Let's look at all-Russian statistics — in general, industrial production growth in Russia for the five months of 2025 to January-May 2024 slowed to 1.3% against 5.2% a year earlier, the analyst calculated.

The slowdown is coming from the extractive sectors (-2.7%), while in April-May the decline in production began to slow down against the backdrop of a gradual recovery in oil production as part of the OPEC+ deal. Of the four main types of economic activity, positive annual dynamics are maintained only in the manufacturing industry, but even there growth slowed to 4.2 % against 9.3% in the first five months of 2024. The acceleration of growth in the manufacturing industry in May was mainly due to industries related to the military-industrial complex and pharmaceutical production.

In the manufacturing industry in Russia, the following grew: production of other vehicles and equipment (+37.6%); production of medicines and materials used in medicine and veterinary medicine (+16.%); production of computers, electronic and optical products (+15.6%) and production of finished metal products, except for machinery and equipment (+12.8%). In the negative are industries focused on external demand (the exception is the chemical industry), as well as housing construction.

“More recent indicators show a deterioration in the situation with economic activity in June. Data on production activity for June indicate its sharpest decline since March 2022 (the indicator fell to 47.5 from 50.2 in May),” Belenkaya notes. “Respondents associated this with a decrease in the purchasing power of customers and weak demand. New orders, new export orders, production and employment decreased.”

Purchasing activity in the sector contracted at the fastest pace since March 2022. At the same time, price pressure indicators weakened — the growth rate of purchase prices turned out to be the weakest since the period preceding the COVID-19 quarantine in February 2020, and of selling prices — since November 2022.