Six Russian Regions Are On The Verge Of Budgetary Collapse
6- 20.10.2025, 17:42
- 8,008
The situation is dire.
A full-fledged budget crisis is creeping up on Russian regions, which faced a marked drop in tax collections in 2025 and were forced to use all their cash reserves to pay spending obligations, writes The Moscow Times.
As of September 1, six Russian regions had bank account balances covering less than 1 percent of the budget approved for the year - that is, they could afford no more than 2 to 3 days of expenses at the expense of reserves, with Kalmykia had only 40 million rubles left in its accounts, or 0.1% of its annual expenditures.
The reserves of the Volgograd Region, with a population of 2.4 million people and a budget of 196 billion rubles, fell to 100 million rubles, or 0.04% of its annual expenditures. Belgorod Region (budget - Br184 billion, population - 1.5 million people) has only Br200 million, or 0.1% of the amount needed for the year.
Ulyanovsk Region (Br500 million) and Irkutsk Region (Br900 million) kept less than 0.5% of the annual budget - one or two days of expenditures - in their reserves. The reserves of the Murmansk Oblast have fallen to 1 billion rubles: its reserves are enough for two days of expenditures, or 0.7% of the annual budget.
About 5 days of expenditures can be afforded by the reserves of the Novosibirsk, Tula and Yaroslavl Oblasts: their reserves have shrunk to 5.2 billion rubles, 2.3 billion rubles and 2.1 billion rubles respectively.
Russian regions finished the first half of the year with a deficit of 397.8 billion rubles, which grew to 724.8 billion rubles by the end of September. Every third subject (26) recorded a drop in revenues in nominal terms, while in real terms - taking into account inflation - revenues decreased in 53 regions.
Sixty-seven regions closed the first half of the year with a "hole" in local finances. And the deficit champions were Kemerovo region (34% of revenues), Arkhangelsk region (31%), Komi (30%), Murmansk region (28%), Vologda region (25%) and Irkutsk region (24.6%), estimated earlier economist Natalya Zubarevich.
In Irkutsk region because of the budget crisis has already begun sequestration of expenditures: in September, the authorities announced plans to reduce spending on education and health care by 4.9 billion rubles. In 12 regions, teachers faced salary cuts, in three regions - Yaroslavl, Ulyanovsk regions and Dagestan - the authorities began to consider raising taxes for small businesses to cover deficits. And in the Orenburg and Novosibirsk regions and in the Krasnoyarsk Territory, regional parliaments have introduced bills to raise the transportation tax.
The situation with regional budgets is "difficult" and will only worsen by the end of the year, Zubarevich believes: "In December, there will be a lot of spending to close state contracts." The Ministry of Finance estimates that in December, regional expenditures will exceed revenues by 370 billion rubles, and next year - by 300 billion rubles.
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