Updated
Updated · The Moscow Times · Jun 23
Kremlin Defends Russia's Stability Despite $80 Billion Budget Deficit and 4% MOEX Slide
Updated
Updated · The Moscow Times · Jun 23

Kremlin Defends Russia's Stability Despite $80 Billion Budget Deficit and 4% MOEX Slide

3 articles · Updated · The Moscow Times · Jun 23

Summary

  • Dmitry Peskov said Russia’s macroeconomic stability is “absolutely secured,” despite volatile energy markets and mounting strains from the war in Ukraine.
  • A 2.1 trillion-ruble ($28 billion) federal revenue shortfall and a budget deficit above 6 trillion rubles ($80 billion) in the first five months have exposed pressure from weaker profits, lower crude prices and heavy wartime spending.
  • Urals crude has fallen to about $65 a barrel from roughly $120 during the Iran war spike, cutting into a windfall that had briefly supported state finances.
  • The MOEX index dropped more than 4% on Monday to its lowest level in over three years, extending a 15-week slide after a small rate cut signaled borrowing costs may stay high.
  • Inflation risks remain elevated as Ukrainian drone attacks on refineries and fuel networks have disrupted supplies, prompting fuel rationing measures across Russia over the past month.

Insights

With its wealth fund draining fast, is Russia’s wartime economy on a collision course with a full-blown financial crisis?
As the Kremlin funds its war, are deep cuts to public services pushing Russia’s regions toward a breaking point?
Is Russia's growing economic reliance on China a strategic masterstroke or a path to becoming a junior partner?