Russia's regional budgets and social funds benefit most from recovery in government budget revenues

Federal budget revenues rose by over 20 % y-o-y in the first half of this year due to higher oil & gas tax earnings. Transfers to state social funds represented the fastest-growing spending category, while transfers to regional budgets also rose after two consecutive years of declines. Even in nominal ruble terms, other federal budget expenditures were unchanged from a year earlier, due e.g. to defence spending cuts.

Regional and local budget revenue growth accelerated to around 10 % y-o-y. Regional spending rose by over 6 % y-o-y, while regional budget surpluses as a total were unusually large. Revenues and spending of state social funds rose by about 9 %.