SOVEREIGN ECONOMY: TOP EVENTS OF THE WEEK
According to the preliminary data from the Ministry of Finance, the Russian federal budget for January-May was executed with a deficit of 3.411 trillion rubles (with a planned annual deficit of 2.9 trillion rubles). Budget revenues for the five months amounted to 9.818 trillion rubles, 19% lower than the revenue volume for the same period last year. Oil and gas revenues in January-May decreased by 50% - to 2.853 trillion rubles.
Russia's international reserves from May 26 to June 2 have decreased by $1.3 billion. On June 2, they amounted to $585 billion, reported the Bank of Russia (as of May 26, they were $586.3 billion). It is important to understand that the estimate of reserves at $585 billion is formal – at least $300 billion is frozen in foreign accounts and inaccessible for Kremlin.
Hungary has signed a contract to supply alternative gas to Russian gas from Azerbaijan. Azerbaijani SOCAR and Hungarian MVM CEEnergy have concluded a contract to supply 100 million cubic meters of Azerbaijani gas to Hungary in 2023. The deal is expected to form the basis for a long-term contract for the supply of up to 2 billion cubic meters per year.
Banks in Kazakhstan, Armenia, and Hong Kong have begun blocking payments for parallel imports to Russia. The blockade affects supplies of processors, microchips, latest-generation telecommunications equipment, data storage systems and servers. The reason is that banks in these countries fear falling under secondary US sanctions for cooperation with Russian citizens and companies affected by Western sanctions.
Russia's revenues from trade with India are stuck abroad. Russia accumulates up to a billion dollars in rupees every month, which stays in Indian banks, Bloomberg reports. The surplus of rupees arises due to large volumes of Russian oil sales to India amid low import volumes from India to Russia. Russian companies struggle to exchange rupees due to currency restrictions. Between 2 and 3 billion dollars in rupees will settle in accounts in each quarter, which Russia will not be able to use.