Russia's financial stability is under mounting pressure as debt defaults rise, the budget deficit balloons and equities endure their longest losing streak in nearly three decades. A European intelligence estimate seen by Reuters found 10% of Russian corporate loans may go unpaid, while retail non-performing loans at top banks may reach 15%, and personal bankruptcies surged nearly a third to over 500,000 in the past year.
Fiscal pressures are intensifying. The federal deficit reached 6 trillion roubles by the end of May, more than double year-ago levels, though German media put the gap at $75 billion with spending already consuming 55% of the annual budget. The finance ministry is now eyeing access to $40 billion in privately held pension savings and preparing 10% cuts to non-essential spending. The central bank cut its key rate by just 0.25 percentage points in June, below market expectations.
Markets reflect the strain. The MOEX index has fallen for 17 consecutive weeks, the longest slide since 1997, hitting a multi-year low of 2,117.5 points last week. Russian crude prices have meanwhile slipped back to pre-war levels.