Sergey Tsukhlo, Head of Business Surveys Department at the Gaidar Institute, provided to Kommersant the data from May surveys of industrial executives, showing a record high level of business activity.

Business surveys have shown new growth in costs and investment intentions of Russian companies. The Gaidar Institute surveys recorded that enterprises need a strong ruble to reduce the former and realize the latter. In May 2023, the Gaidar Institute's surveys indicated a historically high level of business activity and expectations in the sector. The slight decline in April stabilized in May. At the same time, it follows from the opinion polls of the Gaidar Institute that among all the restrictions "uncertainty of the current economic situation and its prospects" retains the strongest negative effect on the industrial growth, although by Q2 2023 the negative effect of this factor had reduced to 43% of mentions (after the local maximum of 63% in July 2022, see diagram). Sergey Tsukhlo noted that during the "covid crisis" the frequency of its mentioning was higher and amounted to 72%.

"It seems that the largest conflict since the Great Patriotic War was better understood by the industry than the pandemic," the author of the study suggested. The restraining effect of domestic demand (the second most influential factor) has been and remains modest due to unprecedented import substitution, he believes.

The weak external demand and "weak ruble and appreciation of imported equipment and raw materials" were next in the ranking of constraints to industrial growth. While in October 2022 the latter restrained the growth of output in the opinion of 6%, in April 2023 it was already 30% of companies. A detailed study by the Gaidar Institute of the exchange rate (regularly conducted since 2015) in April 2023 indicates that the greatest demand for strengthening the ruble is traditionally shown by industry in connection with the cost of production. This is stated by 71% of companies. A further weakening of the exchange rate will make only 5% of companies switch to cheaper components and raw materials and only 8% say that the costs do not depend on the ruble exchange rate.

The second largest demand for a strong ruble creates investment activity of enterprises and it will stimulate growth of purchases of machinery and equipment from 60% of domestic factories, and only 4% of producers link the growth of capital investments with the weakening of the ruble. The majority (54%) of enterprises also associate the growth of domestic demand with strong ruble. Only 13% of respondents share traditional views (weakening of currency means rejection of expensive imports and growth of domestic demand).

"The explanation of the unconventional view for relationship between the exchange rate of the national currency and domestic demand," according to Sergey Tsukhlo is that strong ruble means cheapening of imported components, to which there is no replacement in the Russian Federation or it will reduce the competitiveness of domestic products.