Russia’s economic situation is more difficult now than in recent years, with a strong ruble, high interest rates, a labor shortage, and budget constraints having largely exhausted the country’s reserves, Economic Development Minister Maxim Reshetnikov said.

Businesses are feeling the strain “most acutely,” he said. The situation is further complicated by tax changes that entrepreneurs are being forced to adapt to.

“So our main task right now is really to help businesses adapt as fully as possible to the current situation,” Reshetnikov said at the all-Russian infrastructure and entrepreneurship support forum “My Business” in Vsevolozhsk, in the Leningrad Region.

In previous years, businesses adapted to the labor shortage and rising wages by drawing on internal reserves. “Now we’re seeing that those reserves are largely exhausted, and the macroeconomic situation is genuinely significantly more difficult,” he added.

The main priorities for businesses in the near term are managing costs and expenditures and improving labor productivity, Reshetnikov said.

At an economic policy meeting on April 15, Vladimir Putin called on the government and Russia’s central bank to explain why macroeconomic indicators had fallen short of expectations. Putin said the decline in Russia’s GDP observed in recent months was the result of “seasonal factors.”