Russia Services Sector Returns to Contraction

The S&P Global Russia Services PMI fell to 49.2 in June 2025 from May’s four-month high of 52.2, marking the first contraction since June 2024. The downturn in the services sector was driven by muted demand and a softer rise in new sales. However, employment declined only marginally, with the rate of job shedding easing from May’s level, while backlogs of work rose for the eighth consecutive month. On the price front, input costs increased due to higher supplier prices and rising wage bills, although overall input inflation eased to its lowest level in just over five years. Meanwhile, output price inflation moderated to its weakest level in nearly four-and-a-half years, as firms attempted to stimulate new sales. Lastly, business sentiment weakened to its lowest level since July 2023, amid growing concerns over headwinds in the sales environment.