Debts of regions (subjects) of Russia

2024

List of regions of the Russian Federation by the size of public debt

The total public debt of the regions of Russia amounted to ₽3,143 trillion in January-October 2024, which is 2.4% less than a year earlier. The volume of public debt decreased in 55 regions, increased in 29 and remained unchanged in five regions.

According to experts from the RIA Rating Center for Economic Research, the highest volume of public debt in January-October 2024 was recorded in the Moscow Region - ₽248,4 billion, a decrease of 12.3% on an annualized basis.

In second place is Moscow with a public debt of ₽170,4 billion (a decrease of 13.4%), in third place is the Nizhny Novgorod region with ₽152,1 billion (a decrease of 2%). They are followed by the Republic of Tatarstan (₽123,6 billion), Krasnodar Territory (₽112,3 billion) and the Sverdlovsk Region (₽104 billion).

According to the RIA Rating agency, the lowest debt burden among the regions of the Yamalo-Nenets Autonomous Okrug is 1.6% of tax and non-tax revenues, the Sakhalin Region - 1.7% and Sevastopol - 1.8%.

The leader in reducing the volume of public debt was the Yamalo-Nenets Autonomous Okrug, which reduced the debt by 46.1%. The largest growth was recorded in the Murmansk region (+ 90.7%), the Irkutsk region (+ 71.9%) and the Kamchatka Territory (+ 48.8%).

In the structure of the regional state debt, the share of budget loans increased to 82.1%, government securities decreased to 12.8%, bank loans - to 2.8%, state guarantees amounted to 2.1%.

The total level of debt burden of the regions decreased by 2.8 percentage points to 21.3%. In 20 regions, public debt exceeds 50% of the volume of tax and non-tax budget revenues, of which more than 70% in five regions.

The volume of municipal debt amounted to ₽368,3 billion, reducing by 7.4%. The total volume of state and municipal debt of the regions reached ₽3,512 trillion, which is 2.9% less than at the beginning of 2024.^[1]

The Government of the Russian Federation approved the cancellation of debts on budget loans for 25 regions. List

The Russian government approved an order to write off debt on budget loans for 25 regions. The corresponding document, signed by Prime Minister Mikhail Mishustin on October 28, 2024, provides for the cancellation of debt totaling ₽25,9 billion, which was sent to the federal budget at the expense of tax revenues from the implementation of investment projects in 2023.

According to the Russian Government, the measure affects entities actively developing infrastructure for new investment projects. The funds from the write-off are aimed at supporting the regions, which will allow them to reduce the debt burden and continue the implementation of projects in the fields of transport, power and utilities.

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The list of regions that have received debt cancellation includes:

• Republic of Bashkortostan - ₽21,9 million
• Republic of Karelia - ₽43,7 million
• Komi Republic - ₽2,1 million
• Republic of Tatarstan - ₽9,47 billion
• Republic of Khakassia - ₽18,8 million
• Udmurt Republic - ₽16,5 million
• Chuvash Republic - ₽116,2 million
• Altai Territory - ₽5,3 million
• Trans-Baikal Territory - ₽25,3 million
• Krasnodar Territory - ₽32,6 million
• Perm Territory - ₽743,9 million
• Stavropol Territory - ₽0,3 million
• Astrakhan region - ₽3,9 million
• Belgorod region - ₽100,4 million
• Vladimir region - ₽16,2 million
• Volgograd region - ₽34,4 million
• Kaliningrad region - ₽188,5 million
• Kaluga region - ₽127,1 million
• Kursk region - ₽525,3 million
• Moscow region - ₽14,16 billion
• Novosibirsk region - ₽146,5 million
• Penza region - ₽53,6 million
• Tomsk region - ₽15 million
• Tula region - ₽11,9 million
• Yaroslavl region - ₽17,7 million

Debt cancellation has become part of measures to support investment activity in regions implementing priority projects in agriculture, tourism, industry, housing and road construction. The mechanism, approved in 2020, allows the regions to compensate for infrastructure development costs through tax revenues from new projects, which makes debt cancellation possible as part of stimulating economic growth in Russian entities.^[2]

Russian President Vladimir Putin signed a law on writing off 1 trillion rubles of debts to Russian regions

In July 2024, the president Russia Vladimir Putin signed a law on writing off 1 trillion rubles debts to Russian regions. This step is aimed at supporting the economic development of the constituent entities of the Russian Federation and the implementation of important infrastructure projects.

According to RBC, the new law provides for the possibility of writing off two-thirds of the regions' debts on budget loans. The total amount of write-off will be about 1.1 trillion rubles. The subjects of the Russian Federation will be able to direct these funds to the implementation of various infrastructure projects, including in the field of housing and communal services and resettlement of emergency housing.

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Kremlin Website

According to the Ministry of Finance of Russia, as of March 1, 2024, the public debt of the Russian regions on budget loans amounted to 1.7 trillion rubles. This amount does not include infrastructure budget loans, special treasury loans and funds allocated for advanced financing.

The process of debt cancellation will take place in stages starting in 2025. An important condition is the actual investment by the regions of the released funds in the target areas. The remaining third of the debt will be returned by the subjects of Russia according to the existing schedules.

The decision to write off debts was announced by President Vladimir Putin back in February 2024 during a message to the Federal Assembly. Then the head of state noted that this will allow the regions to preserve about 200 billion rubles annually from 2025 to 2028.

Prime Minister Mikhail Mishustin stressed that writing off debts will give the regions the opportunity to solve a number of important infrastructure problems. Among the priority areas are the construction, renewal of utility networks, gasification and laying of highways.

In addition, the new law provides for the extension of the deadline for the introduction of the draft budget for 2025-2027 from September 15 to October 1, which will provide additional time for its careful study, taking into account new economic realities.^[3]

Russian Prime Minister Mikhail Mishustin: The government will write off 1 trillion rubles of regional debt on budget loans

The Russian government will write off about 1 trillion rubles of regional debt on budget loans. Prime Minister Mikhail Mishustin announced this on April 3, 2024 during his speech with the government report in the State Duma.

According to him, many regions carry a serious debt burden, therefore, on behalf of the president Russia Vladimir Putin , it was decided to write off two-thirds of their debt on budget loans. Thanks to this, the subjects will be able to solve infrastructure problems - in terms of construction, updating utility networks, gasification, laying transport highways, etc., the head of the Cabinet emphasized.

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On April 3, 2024, the Ministry of Finance of the Russian Federation clarified that the volume of debt write-off to the regions of the Russian Federation for the implementation of infrastructure projects will amount to 1.1 trillion rubles - for example, in the housing and communal services sector or for the resettlement of emergency housing stock. Also, money can be invested in infrastructure for investment projects, provided in the form of tax benefits and compensation for investment tax deduction. As noted in the department, the debt of the regions, starting from 2025, will be written off every year, with actual investment in the target areas of the released funds. The remaining third of the debt will return to the regions according to the provided schedule, added to the Ministry of Finance.

According to Roman Afanasyev, head of the NIFI Center for Interbudgetary Relations, writing off regional debts on budget loans will give the regions an incentive for development.

The state gives the subjects the opportunity to significantly reduce the costs of servicing budget loans and direct the released funds that were supposed to be calculated for debt obligations to solve priority socio-economic problems, he said.[4]

Putin instructed to write off 2/3 of the debt on budget loans to the regions

Russian President Vladimir Putin instructed to write off two-thirds of the debt on budget loans to the regions. The head of state announced this during his message to the Federal Assembly at the end of February 2024.

The regions need to be given broader opportunities to manage funds within the framework of national projects, the Russian leader said (quoted by Kommersant).

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Kremlin.ru

It is assumed that the write-off of two-thirds of budget loans from Russian regions will save 250 billion rubles annually from 2025 to 2028. These funds should be targeted by the regions to support investments and infrastructure projects.

As part of the program of infrastructure budget loans for the regions, the returned loans will be again invested in the development of these regions. It is planned that from 2025 the portfolio of infrastructure loans will be increased by at least 250 billion rubles.

After the use of budget funds received under the loan, the balance, if any, is not proposed to be returned, but directed to further use.

The Federation Council supported Putin's initiative to write off part of budget loans, Nikolai Zhuravlev, vice speaker of the upper house, told Vedomosti.

This will greatly improve the structure of regional budgets and make it possible to develop infrastructure, since regions with a large debt are strongly constrained in development by the budget restrictions of the Ministry of Finance, he said.

The Governor of the Yaroslavskaya Region Mikhail Evraev, in a conversation with the publication, said that Putin's "unprecedented measures to support the regions" proposed would improve the economy. The head of the Arkhangelskaya region, Alexander Tsybulsky, called the presidential initiative revolutionary and added that "they did not even dare to expect it."^[5]

2023: Growth of debt of the regions by 14% to 3.2 trillion rubles

The debt of the Russian regions in 2023 increased by 14% compared to 2022 (2.79 trillion) and amounted to 3.2 trillion rubles. This is evidenced by the data of the Bank of Russia, published in February 2024.

As Vedomosti writes with reference to the regulator's report, the total debt of the regions of the Russian Federation increased largely due to an increase in borrowing by the subjects of the Central Federal District and the Volga region. Thus, the state debt of Moscow at the end of 2023 rose by 40.8 billion rubles, Tatarstan - by 22.2 billion rubles, the Nizhny Novgorod region - by 22.3 billion rubles.

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Pexels

The Central Bank noted that the regions most often took money to repay market loans, which reduced the risks of increasing the debt burden on the budgets of the entities. The Bank of Russia added that in 2024 the financing of deficits will be carried out on the same principle.

According to the expert of the group of sovereign and regional ratings of ACRA Ilya Tsypkin, the largest increase in budget loans in 2023 relative to 2022 occurred in the Rostov region (+ 161%), Khanty-Mansi Autonomous Okrug (+ 159%), St. Petersburg (+ 154%) and Primorsky Territory (+ 141%).

Budget loans in 2023 were mainly issued to finance the investment expenses of the subjects, notes Tsypkin. The regions mainly received them for advanced financing of expenditure obligations, which should be repaid in 2024 through transfers from the federal budget. That is, budget loans in 2023 were mainly issued to finance the investment expenses of the subjects, the expert added.

In fact, budget loans are an additional financial instrument for the development of territories, said Vladimir Klimanov, director of the RANEPA Regional Policy Center. Therefore, budget loans provided for 15 years at low interest rates can be considered simply as an additional interbudgetary transfer or other financial resource received in the territory.^[6]

2022

Reduction of the national debt of the regions by 46 billion rubles

The national debt of the regions of Russia by the beginning of 2022 decreased by 46 billion rubles compared to the indicator of a year ago and amounted to 2.45 trillion rubles. This is evidenced by the data of the Ministry of Finance of the Russian Federation, published in March 2023.

According to the Accounts Chamber (JV), at the beginning of 2022, the volume of public debt of the constituent entities of the Russian Federation increased by 5.2% compared to 2017. Of the regions tested, the largest increase in debt was noted in St. Petersburg - by 6.2 times, the Moscow region - by 2.7 times and the Sverdlovsk region - by 37.8%. In the Novgorod region, the republics of Tatarstan and Sakha (Yakutia), the increase in debt ranged from 1.5 to 11.1%. In the Irkutsk region, public debt decreased by 24%.

The national debt of the regions of Russia for the year decreased by 46 billion rubles

According to the joint venture, in total in 2017-2021. the regions checked by the department received loans from the federal budget in the amount of more than 896 billion rubles. Also, the regions were provided with treasury loans (to replenish the balance of funds on the budget account) in the amount of 2.2 trillion rubles.

As the audit showed, the regions mainly used the loans provided to repay debt obligations (more than 50%) and pay current expenses (more than 47%). At the same time, the share of budget loans aimed at investment purposes was extremely insignificant. The exception was St. Petersburg, where more than 63% of loans provided from the federal budget were allocated for investment purposes.

During the audit, violations and shortcomings in the management of public debt were noted in all seven regions. Thus, the regions did not comply with the restrictions on borrowing volumes established by the Budget Code. At the same time, responsibility for this is not provided for by law. Certain regions did not fulfill the conditions of agreements on the provision of budget loans in terms of achieving the established target values ​ ​ of indicators, indicated in the joint venture.^[7]

Top 7 regions of the Russian Federation in terms of public debt

According to the Ministry of Finance of the Russian Federation, the total volume of public debt of all constituent entities of the Russian Federation in the first nine months of 2022 increased by 8.9% compared to the same period in 2021 and amounted to 2.694 trillion rubles. In absolute terms, the public debt grew by 219.5 billion rubles, and almost a fourth of its increase fell on the Samara region, Chelyabinsk region and Nizhny Novgorod region. The corresponding statistics were published in November 2022.

Compiled the top 7 regions of the Russian Federation in terms of public debt

The list of regions with the largest public debts by October 1, 2022 is as follows:

• Moscow region - 274.9 billion rubles.
• Moscow - 131.4 billion rubles.
• Nizhny Novgorod region - 118.8 billion rubles.
• Krasnodar Territory - 105.6 billion rubles.
• Sverdlovsk region - 103.3 billion rubles.
• Republic of Tatarstan - 95.5 billion rubles.
• St. Petersburg - 93.3 billion rubles.

The low level of debt burden in the three quarters of 2022 was recorded in 14 regions and compared to the beginning of the year, their number increased. The composition of the leading group, where public debt is less than 10% of the volume of tax and non-tax revenues of budgets, has been replenished by St. Petersburg over the past nine months. As of October 1, 2022, it includes: Yamalo-Nenets Autonomous Okrug (1.2%), Leningrad Region (1.9%), Tyumen Region (2.2%), Moscow (3.7%), Khanty-Mansiysk Autonomous Okrug - Ugra (3.7%), Sakhalin Region (4.1%), Nenets Autonomous Okrug (4.2%), Altai Territory (5%), Primorsky Territory (6%), Republic of Crimea (6.1%), Irkutsk Oblast (8.4%), St. Petersburg (8.6%) and Vladimir Oblast (9.1%). In all these regions, the debt burden for the nine months of 2022 increased, with the exception of the Yamalo-Nenets Autonomous Okrug, Moscow and. St. Petersburg There is no public debt in Sevastopol.^[8]

2020

The national debt of the regions of the Russian Federation grew by 18%, to 2.49 trillion rubles

"At the end of 2020, the public debt of the constituent entities of the Russian Federation increased by 383 billion rubles, or 18%, and reached 2496 billion rubles." - Ministry of Finance.

Regions of Russia allowed to give each other loans

On April 17, 2020, the State Duma in the second and third readings adopted a bill allowing the regions to issue loans to each other. We are talking about the so-called horizontal budget loans.

The new norms provide for the possibility of attracting borrowed funds from the budgets of other regions by the regions in 2020. A horizontal loan can be taken for up to three years. It is assumed that the amendments will help citizens and businesses amid a downturn in the economy due to the COVID-19 coronavirus.

The Russian government lifted the ban on lending to one region to another

This will allow the regions to provide assistance to enterprises, will allow, due to regional opportunities, to do everything so that our wages are paid on time and citizens are protected, "said Vyacheslav Volodin, speaker of the lower house of parliament, on Thursday following a meeting of the Duma Council.

According to Prime Minister Mikhail Mishustin, the new amendments by the government "will give the regions more maneuver in finding resources for the development of the local economy and improving the standard of living of people."

In addition, within the framework of the adopted amendments to the Budget Code, the right of the Government of the Russian Federation in 2020 to carry out state internal and external borrowings and provide state guarantees of the Russian Federation with an excess of the upper limits of the internal and external public debt, government borrowing programs and state guarantees provided for in the federal budget.

The innovation will also allow regional and municipal authorities to issue debt securities, even if they do not have the necessary credit rating.

In turn, the government is also ready to allocate additional funds to the regions to support the economy. On April 15, at a meeting with members of the government, President Vladimir Putin instructed to allocate 200 billion rubles for this.^[9]

2019:4% debt reduction

In 2019, the volume of public debt in Russian regions decreased by another 4% and dropped almost to the level of pre-crisis 2014. In total, at the end of the year, the regions remained in surplus, although compared to 2018, this figure decreased by more than 30 times (to 15.5 billion rubles against 491.5 billion rubles).

2017: Sevastopol is the leader in debt growth

In February 2018, the rating was published, which analyzed the dynamics of the debt of regional budgets on loans provided to them by the federal budget to the federal budget according to Rosstat data for the period from 2007 to 2017.

Most of the regions have dynamics worse than the national average. Only one region has a tendency to reduce debt to the budget. This is Kabardino-Balkaria. But to believe that the CBD is an exemplary republic in terms of the situation with debts would be wrong. Debts there are very high relative to GRP, high even by North Caucasian standards. The debt burden there decreased in the late 2000s - early tenths, mainly due to the fact that the republic practically crushed the entire market for inexpensive vodka.

But after the Rosalkogolregulirovanie was established in 2010, which took up the Catalan vodka harshly, problems began at the legal market of Kabardino-Balkarian vodka. It would seem that counterfeit products that created competition for legal producers were over, the market was cleared. But it turned out that legal products, too, for the most part did not comply with the standards. The "golden period" of debt payments to the budget is over.

In 2013, republican vodka workers began to receive subsidies, up to 70% of excise taxes received by the regional budget were returned to them. Production rose, and Republican debt also declined. But in 2015, Rosalkogolregulirovanie began to close distilleries in the CBD in a row. Debts began to grow immediately. At the end of 2017, debt is expected to grow by 25-30% in the CBD^[10].

As for North Ossetia, which is in second place, the picture is similar there - this is one of the two centers for the production of cheap vodka in the first half of the reporting period. Of course, huge subsidies to the republics of the North Caucasus also play a role, apparently, for this reason Chechnya also got there, although, of course, compared to the situation at the beginning of the reporting period, when the republic had not yet had time to recover from the consequences of the Second Chechen War, debts began to slowly return also due to relative stabilization of the economy.

The worst situation is in Sevastopol. The reasons for this are clear: the city receives from the center for various production and infrastructure projects, which is why debt burden has grown and will continue to grow. However, by the end of 2017, an improvement in the situation should be expected, since the budget plan was fulfilled, taxes were received by the budget by 10 billion rubles more than in 2016. If we compare the situation with the Republic of Crimea, which has a much better debt situation, then Sevastopol is in a less favorable position: here on a small territory there is a large concentration of objects requiring additional funds.

Against this negative background, the Murmansk region and the Nenets Autonomous Okrug can be distinguished, where a small increase in debt to the federal budget is really associated with an improvement in the economic situation. As of autumn 2017, credit agencies in the Murmansk region assigned credit ratings above average. The main factors due to which the region has such debt stability:

• sending additional revenues received in the execution of the budget to early repayment of expensive debt obligations,
• raising temporarily unused balances in the accounts of institutions to cover cash costs,
• attracting short-term budget loans,
• issue of a bond loan of the Murmansk region.

At the end of 2017, a reduction in debt to the federal budget is expected. This is due to the stabilization of oil prices, as well as to measures taken by the district administration to combat debt: obtaining short-term treasury loans, issuing bonds in 2017, "long" and cheaper loans relative to bank ones. Changes have been made to the State Internal Borrowing Program of the NAO. In 2018, it is planned to place securities in the amount of 1.4 billion rubles. In 2017, as a result of these measures, the debt amounted to about 20% of the annual revenues of the treasury. In the event of a significant increase in oil prices, the resources received are planned to be used, among other things, to reduce the debt burden.

2012

Growth of transfers from the federal budget by 11% in the first 10 months

According to the results of the first ten months of 2012, the volume of transfers to the regions increased by 11.5 percent compared to the same period a year earlier.

On the eve of the media reported that in 11 Russian regions there are signs of a full-fledged financial and economic crisis. The list includes:

• Chechnya,
• Ingushetia,
• Dagestan,
• North Ossetia,
• Chukotka,
• Tuva,
• Jewish Autonomous Region,
• Transbaikalia,
• Murmanskaya,
• Kemerovo and
• Vologda Oblast.

These regions suffer from a decline in industrial production and a decrease in the profits of local companies, which, in turn, reduces budget revenues from income tax^[11].

According to the results of the first eight months of 2012, the number of regions with negative profit and loss balances amounted to 13, while a year earlier there were only five such entities.

Deputy Minister Klepach: Regional budget deficit may grow from 50 billion to 1.8 trillion rubles in 2018

The deficit of the consolidated budget of the regions by 2018 may grow from 50 billion to 1.8 trillion rubles. This, as reported by Interfax, said Deputy Minister of Economic Development Andrei Klepach.

According to him, the imbalance in the income and expenses of the regions will be associated primarily with the need to raise salaries for teachers and doctors. The deputy minister said at a seminar of regional leaders of legislative authorities that the subjects may have to borrow funds in the market, as well as introduce new taxes. The ministry does not yet have any specific proposals to prevent the growth of the deficit.

Debt growth forecast due to the need to comply with May decrees of President Putin

About half of the Russian regions during 2013-2014 will be forced to borrow money, which may lead to bankruptcy of some of them. Such conclusions were reached (autumn 2012) by analysts of the rating agency Standard & Poor's. The growth in regional spending will be associated with election promises and the first decrees of Vladimir Putin.

According to the estimates of the rating agency, 8.4 percent of GDP will have to be spent for these purposes, and only 15 percent of this money will be financed by the federal treasury. The rest will be for the expenses of the regions.

Putin signed decrees enshrining his campaign promises in May 2012. They provide for an increase in the salaries of military personnel, an increase in spending on education, science and the development of the Far East, as well as the creation of works.In October, the Accounts Chamber stated that the budget for 2013 and the planning period 2014-2015 did not provide enough funds for the implementation of presidential decrees.

In general, the public debt of the regions of Russia, according to S&P forecasts, in 2013 will grow by one and a half times. S&P calculated that in 2013 the constituent entities of the Russian Federation will borrow 500 billion rubles, and a year later - 700 billion rubles^[12] to ^[12].

Earlier, Russian Finance Minister Anton Siluanov said that there is no danger of default for the constituent entities of the Russian Federation.

Agency experts believe that in 2013 the regions will be forced to borrow more due to declining incomes. Thus, one of the main sources of money for the constituent entities of the Russian Federation is income tax, which in 2012 is growing slower than inflation.

Debt of entities 1.17 trillion rubles at the beginning of the year

At the beginning of 2012, the debt of the constituent entities of the Russian Federation amounted to 1.171 trillion rubles. In 19 regions, it was above half of annual income.

Notes