Six Russian Regions Left Without Money

Shoigu's homeland has been left without budget reserves.

Six Russian regions have exhausted their budget reserves and entered the year 2023 with a complete or nearly complete lack of funds in their accounts. RBC reports that this conclusion was made by Expert RA analysts who analyzed data from the Electronic Budget portal.

Although in general, the "cash cushion" of the regions in 2022 increased by 13% and reached 2.28 trillion rubles, some subjects were forced to actively spend their savings, and some "lost" them without a trace.

This includes the Republic of Tyva, which has "nothing left in its reserves", Expert RA says. Kalmykia, Buryatia, Karelia, the Murmansk region, and the Chukotka autonomous district also diverted almost all their money to patch up holes in local budgets.

Overall, the regions ended last year with a small budget surplus of 50 billion rubles: 50 of them were profitable, while 35 suffered deficits. Since autumn, however, every third region was short of taxes and five regions suffered a complete revenue collapse.

For example, in the fourth quarter, the Tyumen region lost every second ruble in taxes: the tax revenues dropped by 48.9%. The Krasnoyarsk region lost 39% of its revenues, while the Murmansk region lost 33%, Khakassia lost 32% and the Kemerovo region lost 30%.

Alexander Deryugin, Head of the Budget Policy Laboratory of the Gaidar Institute, notes that the main source of problems for regional budgets was the corporate income tax: while in the first half of the year, it was increasing rapidly (+45%), in t,he second it began to fall (-30%), which accelerated to 40% in the fourth quarter.

The year 2023 will bring new budget problems to the regions, Expert RA believes. Against the background of sanctions against major Russian companies which have cut off the metallurgical, coal mining and timber industries from foreign markets, their deficit could reach 1.9 trillion rubles by the end of the year.

Analysts estimate that governors will have to spend about 800 billion rubles from their "safety cushion" to cover it. "The results of 2023 are likely to be summed up by the regions with a reduction in account balances to RUB 1.44 trillion due to the planned partial coverage of the projected regional budget deficit and subdued expectations for tax and non-tax revenues," Expert RA warns.