Experts have named regions in the “red zone” of public debt. Regional government debts: among the largest debtors are Krasnodar, Krasnoyarsk and Tatarstan Rating of regional debt burden

Rating of Russian regions by debt. The volume of debt of the federal subjects in Russia is still relatively small, but at the beginning of this year, already a third of the regions fall into the zone of debt instability, and a tenth of them violate the debt standards established by law.

The debt of the subjects of the Federation in Russia as of January 1, 2017 amounted to 2.35 trillion rubles. Debt of municipalities – 0.36 trillion. This is quite a bit for the large Russian economy: a total of about 3.2% of the country's GDP. For comparison: the federal public debt of the Russian Federation at the beginning of 2017 was four times larger - about 10.4 trillion rubles. (internal and external).

But when compared with the regions’ own incomes, the debt burden on the regions seems significant - it amounts to about a third of their own incomes. This is a significant, if not critical, value.

However, 42% of this debt is the non-market debt of the regions to the Russian Federation (the interest rate on it is 0.1% per year, compare with commercial rates - above 10%). It is clear that with such percentages, the share of debt servicing costs on average in the budgets of the constituent entities is very small (2.3% on average as of January 1, 2016).

Regional debt has been growing significantly over the past 10 years. During the previous crisis (2008–2009), it jumped from 15% of the regions’ own income to 25%. The current one increased it to 32.8% in 2016.

In recent years, a policy has been pursued of gradually replacing commercial loans with budget ones. The share of commercial loans in the government debt of constituent entities decreased from 66% in 2013 to 54% in 2016. But it is obvious that the Ministry of Finance of the Russian Federation is carrying out this replacement reluctantly and slowly, and is not at all eager to take on the debts of the regions. Although sometimes this seems preferable to the Ministry of Finance than providing the regions with additional non-repayable subsidies. In addition, there are purely political benefits of such a strategy - the regions’ dependence on the government and the Kremlin increases, which is important during the pre-election period.

The financial department strongly emphasizes that the process of replacing commercial loans with budget ones is a temporary anti-crisis measure. In 2016, in the first 11 months, the Ministry of Finance provided regions with interbudgetary loans worth 305 billion rubles. (including repayment – 185 billion rubles). This is almost 8% of the regions’ debt – in general, a lot. For 2017–2018, the budget law plans to provide them in the amount of 200 billion rubles. (this amount was “knocked out” during the bargaining in the Federation Council, the figures were initially expected to be half that amount), and in 2019 – 50 billion rubles. The replacement process is slowing down.

The share of securities in regional debt has remained unchanged over the past two years – 19% (2013 – 26%). The leadership of the constituent entities of the Federation was clearly unable to implement Vladimir Putin’s recommendation on the preference for using bond mechanisms for raising funds over bank loans. At the beginning of 2017, 44 regions (more than half) had no debt in securities. According to the Ministry of Finance, in 2016, 74 subjects of the Federation planned to attract bank loans, but only 27 planned to issue bonds (22 regions actually carried it out). At the same time, the main instrument for placing regional bonds on the market is not auctions, but “bookbuilding” (formation of an order book, in fact, an auction in reverse, with a decrease in the rate). In the practice of issuing bonds of the Russian Federation on the domestic market, almost only an auction is used. This demonstrates a clear lack of demand for regional bonds.

"Beyond the Line"

8 regions - almost every tenth - have already turned out to be fined, violating the Budget Code of the Russian Federation. It prohibits regions from borrowing above the level of their own income (for highly subsidized regions - 50% of their own income). A list of these 8 regions is shown on the map).

However, the restrictions of the Budget Code in practice are very “soft”. Until January 1, 2018, the amount of budget debt is not taken into account in the maximum amount of the state debt of the subject, as well as the amount of budget loans attracted in the current year. Taking this into account, only one region out of 8 is “penalized” - the Republic of Khakassia with its large share of commercial loans. And the leader - Mordovia - drops from the sky-high 176% to an acceptable 77%. And there are no penalties for violating the state debt limits of subjects established by the Code. However, the Ministry of Finance, of course, has quite enough leverage to “call to order” especially outstanding ones.

But there is no great desire to use them. For example, the financial department was unable or unwilling to oppose Mordovia’s powerful borrowing program: over the past 3 years, it has increased its debt by more than 1.5 times, including through budget loans. It seems that no one in the country is particularly concerned about the situation, including Mordovia itself. Why should she worry? Despite the record debt, the cost of servicing it in the 2017 budget is a modest 2.4% - almost at the level of the regional average for Russia.

The only concern is the international rating agency Fitch, which in February 2016 assigned and in August confirmed a long-term rating for Mordovia at B+, with a stable outlook. It classifies it as a high-risk speculative rating: “financial obligations are currently being met, but the ability to continue making payments is vulnerable if the business environment or economic conditions deteriorate.” For comparison: Russia's rating, according to Fitch, is BBB- (below average reliability).

Fitch commented on its decision on Mordovia in August as follows: “the republic’s volatile operating performance and high direct risk due to significant capital expenditures, which are mitigated by obtaining long-term loans from the federal budget at a low interest rate.” And it threatened the republic with a downgrade if the “direct risk” (the ratio of debt to own income) exceeds 140%. As we see, it exceeded, and significantly. So far Fitch has not responded to this.

The above-mentioned “fine” Republic of Khakassia, even under the current lenient requirements of the Budget Code, with high commercial debt, is assessed by the same Fitch more favorably: its rating is higher, BB-, the forecast is stable. “Khakassia’s operating balance is acceptable, which nevertheless remains insufficient to cover increased interest payments due to the high direct risk accumulated as a result of a significant budget deficit,” agency analysts write.

What about the Ministry of Finance? In the recently published “Main Directions of Debt Policy...” he admits violations in 8 regions and that in 2017 several more regions will cross the “line.” But the average level of debt burden of the subjects is assessed as “acceptable”, since it “does not bear significant risks of a debt crisis.”

"Red Zone"

The Budget Code of the Russian Federation defines two criteria for the debt sustainability of subjects:

– debt to own income,

– debt servicing costs to total budget expenditures*.

According to the second criterion, the regions are doing well - due to the high share of interbudgetary loans in debt with almost zero interest. But there are obvious problems with the first criterion.

The Ministry of Finance considers regions with “low debt sustainability” to be those whose debt-to-income ratio is over 85% (for highly subsidized regions – over 45%). The list includes 24 regions according to the first criterion (8 “beyond the line” and 16 “below the line”). According to the second criterion, 3–4 dozen regions** may qualify, of which no more than a dozen have a debt-to-income ratio below 45%.

Thus, more than a third of Russian regions fall into the “low debt sustainability” column, and a tenth are frankly below the debt risk line.

The list of “red zone” regions itself looks very diverse: there are national republics and Central Russian regions. The regions are headed (they were during the collection of debt) by both pro-government “appointees” and former communists or completely liberal governors. But what is practically absent there are neither donor regions (they earn enough to borrow little) nor subsidized regions (they have too little of their own income to borrow much).

"Norm"

2 regions do not have public debt at all - this is the “donor” Sakhalin region, which has been making good money for the last decade on PSA oil projects, and the “subsidized” city of Sevastopol, which has more receipts from the federal budget than its own income, and apparently did not have time to collect for the last 3 years of loans. But the Republic of Crimea made it: its debt is 5.4 billion rubles. (17.5% of own income).

9 regions of the country have public debt below 10% of their own income - these are mainly rich regions with high tax revenues. The Altai Territory looks strange in this list with its subsidy rate of 66%; it clearly lags behind other regions with its borrowings. But, according to the three-year budget he adopted, the region is beginning to actively borrow and will leave this group already this year (i.e., it will accumulate debt).

Here, “normally”, are almost all the “donor” regions **** - Moscow, St. Petersburg, oil and gas Khanty-Mansi Autonomous Okrug, Yamalo-Nenets Autonomous Okrug, Nenets Autonomous Okrug, as well as Tatarstan and others. The debt of these regions has one distinct feature - it is mainly government securities. Thus, in the Khanty-Mansi Autonomous Okrug their share amounted to 87% of the region’s total debt, in Moscow – 78%, in the Krasnoyarsk Territory – 63%. The remaining part of the debt is inter-budgetary loans; these regions borrow little from banks (too expensive, bonds are cheaper). Their credit ratings, as a rule, are at the level of the Russian Federation or slightly lower.

But the leading regions in terms of the level of subsidies entered the “average”, above the Ministry of Finance “norm” (with debt from 50% to 85% of their own income). These are Ingushetia (receipts from the federal budget are 7.9 times higher than their own income), Chechnya (5.4 times), Tyva (4.3 times), etc. With such small own incomes, even a small debt already brings these regions to a high level .

Debt "traffic light"

Thus, approximately a third of the subjects are in the “green” (within the Ministry of Finance’s “norm”) in the “red” (risky) zones, and the remaining third are in the “yellow”.

The average level of regional debt does not pose a threat to the country. Even debt leaders today are very far from the possibility of default. Nevertheless, the Ministry of Finance took measures to contain regional budget deficits, causing them to enter the commercial loan market. So far, nothing special has been needed for this. Enough of the “moral” work with debtors... and the pressure of the level of subsidies. In 2016, the growth of regional debt practically stopped, and its structure for the regions improved - the share of budget loans with near-zero interest increased. Even debt-leader regions with pre-default ratings (for example, one letter “B” from Fitch) have not yet encountered difficulties in making new loans. And they are even planning to enter the government securities market. The amount of debt service for the regions of the “red” zone is not critical for the federal budget.

But what could happen if oil prices suddenly go down and the federal budget deficit begins to increase? The instability of the federal situation can immediately spread to the regional level. In addition, this year will be the last to calculate the results of the implementation of the May (2012) presidential decrees, according to which the main share of funding is assigned to the regions. How can they report? The problem of regional debts is still small (although it is growing), but, as they say, it is not the path up the mountain that irritates, but the pebble in the shoe...

* The BC RF sets the limit value of this indicator at 15%. The Ministry of Finance considers the share of service costs in the total own expenses of St. to be critical.  8%, but almost all Russian regions, as far as one can judge, are still outside the risk zone.
** Highly subsidized regions are those in which gratuitous receipts from the federal budget exceed 40% of the volume of own revenues of the consolidated budget of a constituent entity of the Russian Federation during two of the last three years. Accurate personal calculations are very labor-intensive; the list of highly subsidized regions is not officially published.
*** See “Recommendations for the implementation by constituent entities of the Russian Federation of a responsible borrowing/debt policy” on the website of the Ministry of Finance.
**** See the list of “donor” regions in the “Rating of Russian Regions”, “Profile” No. 47 of December 19, 2016.

The public debt of Russian regions as of December 1, 2016 decreased by 110.2 billion rubles, or 4.8%, compared to the beginning of the year. Izvestia was informed about this by the Accounts Chamber. At the same time, according to the joint venture, in the last month of the outgoing year this figure may increase slightly, but the debt of the subjects will be less than a year ago.

One of the reasons is the ongoing process of replacing commercial loans with budget ones. However, the regional debt situation remains serious, President Vladimir Putin noted during a press conference last Friday. Moreover, the debt is heterogeneous - for example, five entities violate the Budget Code, the head of state emphasized and promised that assistance would be provided to them. But this will rather be “first aid” - the problem must be solved by changing the interaction between the Ministry of Finance and entities with high debt.

The state helped

As Vladimir Putin noted at a press conference, regional debt is a serious issue. Indeed, the state debt of the regions was steadily approaching 2.5 trillion rubles at the beginning of this year. However, as the Accounts Chamber told Izvestia, as of December 1, 2016, the regions’ debt decreased by 110.2 billion rubles and amounted to 2.208 trillion rubles, which is almost 5% less than in January of the outgoing year. At the same time, however, an increase in the volume of debt obligations in January–November was observed in 34 regions.

The joint venture also notes the ongoing process of changing the structure of the state debt of the subjects. Thus, this year the state again became their main creditor due to the replacement of commercial loans with budget ones at a symbolic one percent. 340 billion rubles were allocated for these purposes in the past year. That is why the amount of debt on budget loans increased compared to the beginning of the year by 185.2 billion rubles, or 22.9%, and amounted to 993.9 billion rubles (a share of more than 45%). An increase in budget debt occurred in 56 regions.

At the same time, the share of commercial loans decreased, which in the structure of public debt amounted to 30.8% as of December 1. Debt to credit institutions has decreased since the beginning of the year by 284.4 billion rubles (or 29.5%) and amounted to 681 billion rubles. However, the Accounts Chamber notes, “in a number of regions, the practice of borrowing does not have the proper consistency and predictability, which leads to facts of irrational attraction of bank loans. Thus, in 17 regions there is an increase in debt on commercial loans.”

According to the Accounts Chamber, as of January 1, 2017, that is, in December, the state debt of the regions will increase slightly, but will probably be less compared to the figure at the beginning of 2016.

The joint venture cites the problem of unbalanced budgets of the regions as the main reason for the growth of regional public debt. Thus, the income of most of them does not cover the costs of previously accepted expenditure obligations, which leads to an increase in the number of regions that form their budgets with a deficit and increase their debt obligations.

The Accounts Chamber provides the following data to support this statement: as of December 20, 2016, the execution of consolidated budget revenues amounted to 9.247 trillion rubles, or 97.1% of the envisaged volumes. Execution of expenses for the past period amounted to 8975.2 billion rubles, or 85.4% of the stipulated volume.

As indicated in the joint venture, in January–November 2016, the share of debt on budget loans increased by 10.1 percentage points and this growth had a positive impact on the quality of the total debt portfolio of the subjects, reduced the burden of servicing debt obligations, but did not solve the problem of balancing regional budgets .

“The practice of using budget loans as a source of covering the current deficit and replacing commercial loans does not eliminate the emerging imbalance in the volume of actual income and accepted budget obligations and does not ensure stabilization of the situation,” the Accounts Chamber notes.

Subject to subject discord

According to the updated credit ratings of the National Rating Agency (NRA) from 83 regions (the Republic of Crimea and the city of Sevastopol were not assigned ratings due to the lack of the required amount of statistical information), the ratings of 33 entities were downgraded, 28 were upgraded and another 22 were confirmed.

The debt burden indicator is calculated as the ratio of the region's public debt as of October 1, 2016 to the regional budget's own revenues (tax and non-tax) for the past year (October 2015 - September 2016). In the Budget Code, the maximum value of this indicator is fixed at 100%, that is, the volume of a region’s public debt should not exceed the total annual volume of its own budget revenues. For highly subsidized regions (those are regions in which the share of subsidies for at least two of the last three years has been more than 40% of their own budget revenues), the maximum value of this indicator is 50%, the analyst explained.

He noted that a “negative” forecast was assigned to regions that have a combination of three conditions: public debt exceeds 100% of their own income, during the nine months of 2016 this debt increases, and there are also violations of budget legislation and (or) the terms of agreements on the provision of budget loans. These regions included the Republics of Mordovia, Khakassia, Mari El, Trans-Baikal Territory, as well as Smolensk, Pskov and Kirov regions. As the agency emphasizes, the listed regions may lose access to new budget and commercial borrowings.

The Ministry of Finance may indeed block access to inexpensive refinancing for violators of the Budget Code. However, as Alexander Pakhalov believes, the state will support regional authorities in terms of servicing their public debt, as well as provide assistance in exchange for stimulating the economy.

Indeed, at a press conference, Vladimir Putin noted that only five regions violated this principle (debt-to-income ratio of 50%. - Izvestia) and they need special support, and they also require special attention. He recalled that this year more than 300 billion rubles were allocated to “refinance these regions, collect their debts from commercial banks and refinance them for government loans, loans from the Ministry of Finance, which are issued for a long period at one percent, at a symbolic interest per annum " This work will continue further.

Next year we will also provide the necessary resources for these purposes,” the president promised.

It is known that in 2017 the government planned 200 billion rubles for this assistance.

Targeted approach

In addition, as noted in the Accounts Chamber, in 2017, in order to improve the situation with the balance of regional budgets, subsidies are provided to equalize the budgetary provision of the regions in the amount of 615 billion rubles (an increase of 100 billion rubles compared to 2016). In addition, a new principle has been established for the provision of subsidies on the basis of agreements concluded with the Russian Ministry of Finance on the conditions for their provision.

The main intrigue is what incentives will there be for governors when signing these agreements, says a leading NRA analyst.

“When providing budget loans in 2017 and concluding relevant agreements, it is advisable to consider the possibility of using a differentiated approach, taking into account the current situation with the debt burden and their real capabilities to fulfill the terms of the agreements,” the Accounts Chamber believes.

And only after the situation has stabilized, it is possible to develop approaches to restructuring or installment payments of subjects’ debt on previously issued budget loans with an extension of their repayment terms, providing for a phased, uniform repayment of the restructured debt while maintaining the amount of fees for using budget loans.

Chief analyst of FG BCS Vladimir Tikhomirov also believes that at this stage the solution to the problem largely depends on government assistance. In his opinion, if governors now begin to actively lay off civil servants to reduce costs, this will lead to an increase in unemployment.

It is obvious that the problem with these regions cannot be solved quickly in principle - after all, everything depends not only on production. It is difficult for them to be attractive for investment or tourism due to certain reasons - remoteness, unfavorable climate or ecology, the analyst believes.

Therefore, he emphasizes, the Ministry of Finance can take a tough position and reduce funding, but this will not solve the region’s problems.

Senior Director, Head of the ACRA Sovereign and Regional Ratings Group Andrey Piskunov believes that given the current economic situation, standardized measures for all entities will be ineffective. Targeted approaches to resolving the problems of each specific region are required.

One of the promising solutions to the problem of regional debts could be an agreement on partial refinancing of the region’s existing obligations on budget loans with a strict fixation of the share of regional debt, which must be repaid at the expense of the region itself. This will stimulate regional authorities to find sources of debt repayment and will introduce the practice of a responsible attitude towards their debts and debt policy,” Andrey Piskunov concluded.

RIA Rating - March 2. According to the Ministry of Finance of the Russian Federation, the total volume of public debt of all constituent entities of the Russian Federation at the end of 2016 increased by 1.5% and as of January 1, 2017 amounted to 2.353 trillion rubles. This is the smallest increase in government debt over the past few years. For comparison, in 2015 the state debt of the regions of the Russian Federation increased by 11%, in 2014 - by 20%, in 2013 - by 28.6%. The decrease in the growth rate of regional borrowing can be explained by the more conservative approach of regional authorities to increasing the debt burden on the budgets of the constituent entities of the Russian Federation, which is justified in the context of the continued unstable economic situation. In addition, according to experts from the Rating Agency "RIA Rating" of the media group MIA "Russia Today", a reduction of Moscow's public debt by 78.6 billion rubles, mainly due to the repayment of external debt, had a certain impact on the overall result. Just a year ago, Moscow was one of the leaders in terms of the absolute value of public debt among all Russian regions. At the beginning of 2017, the capital’s public debt amounted to 61.9 billion rubles.

The volume of municipal public debt at the end of 2016 increased by 6.7% and amounted to 364.3 billion rubles. The total volume of public debt of all constituent entities of the Russian Federation and the debt of municipalities that are part of the constituent entities of the Russian Federation as of January 1, 2017 amounted to 2.72 trillion rubles, which is 2.2% more than a year earlier.

A moderate increase in public debt took place against the backdrop of growing budget revenues of the constituent entities of the Russian Federation. At the end of 2016, the total volume of tax and non-tax revenues of all constituent entities of the Russian Federation increased by 9.6%, while a reduction was recorded only in seven regions. Against this background, the volume of total expenditures of the budgets of all constituent entities of the Russian Federation increased by 5.6%.

More and more budget loans

In the structure of regional public debt, an increasing share falls on budget loans. In 2016, Russian regions actively replaced commercial debt with cheap budget loans. Due to this, the share of budget loans in the total public debt as of January 1, 2017 amounted to 42.1%, and the share of commercial loans accounted for 34.9%. At the end of 2015, the ratio was diametrically opposite. The activation of the debt market led to an increase in regional borrowing, which could not but affect the increase in the share of government securities in the debt structure from 18.7% at the end of 2015 to 19.4% at the end of 2016. The share of government guarantees decreased from 4.4% to 3.8% in 2016. Information on the structure of regional public debt is given in the table >>

In 14 regions there is no debt to commercial banks. With the exception of Moscow, the Tyumen region and Khanty-Mansi Autonomous Okrug-Yugra, the main components of public debt in these regions are budget loans. Regions such as Moscow, Primorsky Krai and Kamchatka Krai have completely repaid their commercial debts over the past year. At the same time, in a number of regions there is a significant bias in the debt structure towards commercial loans, which may cause concern, especially if the region’s position in the debt burden rating is close to the bottom ten.

To determine the level of debt burden, experts from the Rating Agency "RIA Rating" of the media group MIA "Russia Today" compiled a rating of constituent entities of the Russian Federation by the level of debt burden, which reflects the distribution of regional debts and their dynamics in 2016. The rating used data from the Federal Treasury and the Ministry of Finance of the Russian Federation on debt obligations and revenues of regional budgets. As a measure of debt burden, the rating used the ratio of the public debt of a constituent entity of the Russian Federation as of January 1, 2017 to tax and non-tax revenues of the regional budget (own income) for 2016.

The debt burden on the budgets of Russian regions has decreased

The overall level of regional debt burden has decreased over the past year. The ratio of the total public debt of all regions as of January 1, 2017 to the total volume of tax and non-tax revenues for 2016 was 33.8%, which is 2.7 percentage points lower than a year earlier. But at the same time, the range of values in the regional context remains quite wide. The level of debt burden varied from 0% in the Sakhalin region and Sevastopol to 176% in the Republic of Mordovia. Compared to the results of last year, the leading and trailing regions in the ranking have not changed.

The Republic of Mordovia has been at the bottom of the ranking in terms of debt burden of Russian regions for several years now, but it is worth noting that positive changes are being observed here too. At the end of 2016, the level of debt burden decreased by 6.5 percentage points, which was due to a 15.7% increase in tax and non-tax revenues in the region. The public debt of the Republic of Mordovia itself increased by 11.6% due to budget loans and a bond issue worth 5 billion rubles, placed in September 2016.

The number of regions whose public debt exceeds their own income has decreased

In addition to the Republic of Mordovia, in seven more Russian regions the amount of public debt exceeds their own budget revenues, but, compared to 2015, their number has almost halved. As of January 1, 2016, there were 14 such regions. In addition, there are positive trends in this part of the rating: in five out of eight regions, the debt burden decreased over the past year, and in all cases this was due to the faster growth of tax and non-tax revenues compared to increase in government debt.

Judging by the debt structure, not everyone in the bottom group of regions took advantage of the opportunity to replace more expensive commercial loans with lending from the Ministry of Finance of the Russian Federation. If budget loans occupy more than half of the debt structure of the Smolensk region and the Republic of Karelia, and their share in 2016 increased to 58.8% and 51.7%, respectively, then in a number of regions there are structural distortions towards commercial loans. Thus, in the Astrakhan region the share of commercial loans is 50.5%, in the Kostroma region - 52.6%, in the Jewish Autonomous Region - 61%, in the Republic of Mari El - 67.7%. In addition, in the Republic of Khakassia, almost half of the government debt (49.8%) is accounted for by bond issues and another 37.3% by commercial loans. The debt burden in Khakassia in 2016 increased by 28.7 percentage points and amounted to 145.5%. If the debt policy in the republic does not undergo any fundamental changes, then in the near future the Republic of Khakassia may displace the Republic of Mordovia from the position of the bottom region in the rating.

As of January 1, 2017, in 54 regions of the Russian Federation, public debt exceeded 50% of the volume of tax and non-tax budget revenues, of which in 36 constituent entities of the Russian Federation, public debt exceeded 70% of their own revenues. Compared to the previous year, the number of regions in this group decreased slightly - as of January 1, 2016, in 57 regions of the Russian Federation, public debt exceeded 50% of tax and non-tax budget revenues, of which the ratio of public debt to tax and non-tax revenues was more than 70% in 44 regions.

New regions emerged in the group of leaders

A low level of debt burden is still observed in nine Russian regions, but their composition has changed slightly compared to last year. Less than 10% of the volume of tax and non-tax budget revenues is public debt in the Tyumen region, St. Petersburg, Moscow, Altai Territory and Khanty-Mansiysk Autonomous Okrug-Ugra. The places that left the leading group of the Nenets Autonomous Okrug and the Republic of Crimea were taken by the Leningrad Region and Primorsky Territory. There is no public debt in the Sakhalin region and Sevastopol. Five regions in the group managed to reduce their debt burden. In the Khanty-Mansiysk Autonomous Okrug - Ugra and the Tyumen Region, the debt burden has increased.

In most regions of the Russian Federation, the debt burden has decreased

In 2016, the level of debt burden decreased in 63 constituent entities of the Russian Federation. Positive trends are mainly associated with an increase in tax and non-tax revenues, but in some regions there is also a reduction in public debt. The leader in positive dynamics was the Republic of Ingushetia, whose debt burden decreased by 36.8 percentage points due to both a decrease in public debt by 26% and an increase in its own income by 9.4%. In addition, the debt burden decreased by more than 20 percentage points in the Republic of North Ossetia-Alania, the Vologda Region, the Chukotka Autonomous Okrug and the Altai Republic. In thirteen Russian regions, the debt burden decreased by 10-20%.

In 20 constituent entities of the Russian Federation, the level of debt burden has increased, of which in six - by more than 10%. The Republic of Khakassia once again showed the most significant increase, increasing the debt burden by 28.7 percentage points. In addition, in the Nenets Autonomous Okrug the debt burden increased by 25.2 percentage points and in the Astrakhan region - by 24.1 percentage points.

The volume of public debt increased in 49 regions of the Russian Federation

According to experts from the Rating Agency RIA Rating, in 2016 the absolute volume of public debt increased in 49 regions, remained unchanged in the Vladimir region, and decreased in 33 regions. In Sevastopol and the Sakhalin region there is still no public debt.

The leader in positive dynamics was Moscow, whose public debt, including due to the full repayment of commercial loans, decreased by 56%. In addition, the volume of public debt in the Leningrad Region and Kamchatka Territory decreased by more than 30%. The Republic of Crimea, where until recently there was almost no public debt, increased the volume of public debt 13 times in 2016. In the Nenets Autonomous Okrug, the volume of public debt increased 3 times, and in the Tyumen region - by 83%. But the ratio of public debt to the volume of tax and non-tax revenues in these regions is far from risky levels.

The Krasnodar Territory is still the leader in the absolute value of public debt and over the past 2016 its volume increased by 3.3%, reaching 150 billion rubles. But due to an increase in tax and non-tax revenues by 15.4%, the level of the region’s debt burden decreased by 10.3 percentage points, and at the end of 2016 it amounted to 88.2%. In three more regions - the Republic of Tatarstan, the Krasnoyarsk Territory and the Moscow Region - the volume of public debt exceeds 90 billion rubles, but the situation with the debt burden on regional budgets remains at an acceptable level.

In 2017, the growth rate of public debt will be low

Recently, the Ministry of Finance of the Russian Federation has increasingly heard calls for regions to more actively use bond loans, the servicing of which will cost the regions less than loans from commercial banks, and it is also said that budget loans are rather a temporary, anti-crisis measure that cannot exist permanently. basis. As confirmation of this, in the Federal Budget for 2017, only 200 billion rubles were reserved for budget lending compared to 338 billion rubles issued in 2016, and a further reduction can be expected. In addition, budget loans were issued for a period of 3 years, and this year the deadline for repayment of those loans that were received by the regions in 2014 in the amount of 230 billion rubles comes. Even taking into account the fact that the volume of subsidies intended in 2017 to equalize regional budgets has been increased by 100 billion rubles, the Ministry of Finance will not have enough money for everyone. At best, the current debt to the Ministry of Finance of the Russian Federation is refinanced using the budget reserve. Probably, due to the stabilization of financial markets, we can expect a surge in regional activity in the debt market and an increase in the share of government securities in the regional debt structure. Speaking about the absolute volume of debt, we can assume that in the context of expected weak economic growth, the conservative policy of regional authorities regarding borrowing will continue, and the overall situation with regional debts will continue to improve.

Experts from the Rating Agency "RIA Rating" expect an increase in the volume of public debt by 5-7% at the end of 2017, and tax and non-tax revenues of regional budgets within 10%. In this case, the debt burden will be 32-33%, and will not change significantly compared to the 2016 result.

RIA Rating is a universal rating agency of the media group MIA "Russia Today", specializing in assessing the socio-economic situation of regions of the Russian Federation, the economic state of companies, banks, economic sectors, countries. The main activities of the agency are: creating ratings of regions of the Russian Federation, banks, enterprises, municipalities, insurance companies, securities, and other economic entities; comprehensive economic research in the financial, corporate and government sectors.

According to the Ministry of Finance of the Russian Federation, the total volume of public debt of all constituent entities of the Russian Federation at the end of 2016 increased by 1.5% and as of January 1, 2017 amounted to 2.353 trillion rubles. This is the smallest increase in government debt over the past few years. For comparison, in 2015 the state debt of the regions of the Russian Federation increased by 11%, in 2014 - by 20%, in 2013 - by 28.6%. The decrease in the growth rate of regional borrowing can be explained by the more conservative approach of regional authorities to increasing the debt burden on the budgets of the constituent entities of the Russian Federation, which is justified in the context of the continued unstable economic situation. In addition, according to experts from the Rating Agency "RIA Rating" of the media group MIA "Russia Today", a reduction of Moscow's public debt by 78.6 billion rubles, mainly due to the repayment of external debt, had a certain impact on the overall result. Just a year ago, Moscow was one of the leaders in terms of the absolute value of public debt among all Russian regions. At the beginning of 2017, the capital's public debt amounted to 61.9 billion rubles.