The regions will soon be in for a rough night's sleep. Regional budgets could lose their safety nets by the end of 2023.
The total volume of regional budgetary funds remaining may be reduced by more than a third due to the need to finance budget deficits, according to the пишет RBC.
Simply put, the rainy day for which money had been set aside in the regions appears to have arrived.
Last year, despite sanctions and military spending, regional balances were impressive—2,28 trillion rubles. However, in 2023, a portion of these funds, more than 0,8 trillion rubles, will have to be spent to support current needs.
Regions "managed" to set aside a significant amount in 2021, when the budgets of 66 Russian regions were executed with a surplus.
For example, we managed to significantly increase the surplus level in 2021. Lipetsk, Kemerovo, Vologda regions. And even in 2022, despite the sanctions pressure, some regions significantly improved their liquidity, for example, Sakhalin region.
What happened in 2023?
It's simple. Sanction restrictions hit the largest source of tax revenue for regional budgets, alongside personal income tax—corporate income tax.
"The trend toward a significant reduction in income tax revenues will continue in 2023," notes Alexander Deryugin, senior researcher at the Budget Policy Research Laboratory at the Institute of Applied Economic Research at RANEPA.
In his opinion, there are also no prospects for maintaining relatively high growth rates of other tax and non-tax revenues.
In which regions are safety cushions melting the fastest?
The worst-off states in terms of stockpiles are Tuva, which had nothing left at the beginning of 2023, Kalmykia, Karelia, and Buryatia. Murmansk Oblast and the Chukotka Autonomous Okrug were doing well last year, thanks to savings from 2021, but are also rapidly depleting their reserves this year.
