Russia's federal budget deficit reached 6 trillion rubles by end of May, exceeding full-year projection

Russia's federal budget deficit reached 6 trillion rubles ($83 billion) by the end of May, more than double the 2025 level and exceeding the 3.8 trillion rubles projected for the full year, Fortune reported. A European intelligence report seen by Reuters stated that the Kremlin has relied on banks to provide massive liquidity to the economy.

State programs encouraged millions of Russians to take out three or more loans simultaneously.

The June report estimated that 10% of corporate loans may not be repaid, up sharply from 2024, while 15% of retail loans at some top banks may be non-performing. The number of Russians who declared bankruptcy last year jumped by almost a third to more than 500,000. The Russian finance ministry is preparing legislation to access $40 billion in pension savings held in privately managed funds.

The leader of Russia's Communist Party told parliament that 130 trillion rubles held in bank accounts should be mobilized. Russian banks raised red flags on a potential debt crisis last June due to high interest rates. The Center for Macroeconomic Analysis and Short-Term Forecasting stated in December that Russia could face a banking crisis by October if loan troubles worsen.

Russian officials told Putin earlier this year that a financial crisis could hit by the summer amid spiraling inflation. Nonpayments of commercial bills hit $109 billion in January. Nearly 25% of the bond market is at risk of default as of May.

The volume of debt that needs to be rolled over this year is about double from last year, the report said. A Moscow executive told the Washington Post that the government could try to take money by any means. The June report was prepared as the European Union considers another round of Russia sanctions.