Further tightening of Russian regional budgets

Nominal regional budget revenues in January-July 2016 were unchanged from January-July 2015. Transfers from the federal budget to regional budgets fell sharply, even after contracting in most previous years. However, it was covered up by an increase in other revenues in nominal terms, but similar to last year, the increase was quite a bit below inflation.

Regional budget spending in the first seven months of this year rose a couple of per cent in nominal terms from the same period in 2015. Overall spending growth has failed to keep up with inflation for three and half years in a row. Like revenues, spending this year is down in real terms well over 15 % from 2012–13. Among the biggest spending categories, education and healthcare have seen funding develop weakly in 2015 and 2016. Spending in the housing sector has seen the same for several years. Spending on the economy (roads, transport and agriculture) has experienced the greatest relative gains.

Revenues and spending of regional budgets, 2005‒2016

Source: Russia’s Ministry of Finance.