Digital ministry warns govt of losses of IT industry in Apr–June

MOSCOW, May 8 (PRIME) -- Russia’s IT industry could be lossmaking already in April–June unless the support measures drafted by the Digital Development Ministry are taken, it said in a letter to the government seen by PRIME on Friday.

With no support, the IT industry will stagnate with the gross added value to decrease by almost 100 billion rubles from 2019, a 10% fall in nominal terms and a 15% fall in real terms, the digital ministry said.

The average number of employees of the industry in July–December will contract by 27,000 people in comparison to the previous year and will return to the pre-crisis level only by 2024.

Investment in April–June will decrease to 4% from 11% in 2019.

“A heavy debt burden (of more than 216 billion rubles as of the end of 2019 at large and medium-sized enterprises) will be an additional negative factor for development of the industry in the crisis. Sales revenue may plunge to zero already in April–June 2020 that will result in a negative net profit after payment of interest on loans and other deductions,” the digital ministry said.

(74.1169 rubles – U.S. $1)

End %%ee/jst%%