Russian regions may face a budget crisis. This forecast is provided by the Center for Macroeconomic Analysis and Short-Term Forecasting (CMASF). At least nine regions, according to the center’s indicators, are in the “red zone” – Karelia, Kostroma, Pskov, Tomsk, Oryol regions, Kalmykia, Udmurtia, Khakassia and Mordovia. Moreover, the last three have a ratio of debt burden to the level of their own income (a key indicator, the level of danger starts at 84%) – over 100%.
The development of the pandemic and the related quarantine measures and restrictions on economic activity in 2020 increased the risks of a budget crisis in the Russian regions, according to the CMASF analysis. A hard lockdown in April-May and, in a somewhat weakened form, in the following months, caused a decrease in revenues to the treasury of the subjects, a decrease in household income and the need to resist the coronacrisis led to a sharp increase in spending, primarily social and medical, the center’s report says.
Last year, a large-scale crisis was avoided – primarily due to massive support from the federal center – it amounted to 3.8 trillion rubles (in 2019 – 2.5 trillion). In 2021, such assistance will no longer be – it will amount to 3.1 trillion, and in subsequent years the amount will be further reduced, the document says. Moreover, the acceleration of inflation and sanctions risks have led to the fact that since the beginning of this year, bond yields began to rise again. In addition, in 2021, the regions will have to repay about 20% of budget loans, the bulk of which are short-term, which will also limit the possibilities of new borrowing.
The Ministry of Finance said that although they do not see the prerequisites for complicating the financial situation of the regions in 2021, questions about additional support will be considered based on the situation in the economy.
Read more in the exclusive material from Izvestia:
Risk area: experts predict a budget crisis in the regions
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source https://pledgetimes.com/the-regions-are-forecasting-a-budget-crisis/
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