The credit rating of the Tyumen Region (hereinafter, the Region) is based on its high share of internal budget revenues, low debt load and minimal debt refinancing risks, as well as the moderately high assessment of the Region’s socioeconomic development.
The Tyumen Region is located in the Ural Federal District. The Region includes the Khanty-Mansi Autonomous Okrug–Yugra (KMAO–Yugra) and the Yamalo-Nenets Autonomous Okrug (YNAO), which are also full-fledged regions of the Russian Federation. The Region’s population is 1.6 mln (not including the population of the autonomous districts), which amounts to approximately 1.1% of the country’s population. The Region estimates that its gross regional product (GRP) for 2023 may have reached RUB 1,829 bln, which is 6% higher than the previous year in nominal terms and almost 4% higher in real terms. The Region expects that GRP increased by 9% in nominal terms and by almost 3% in real terms in 2024.
KEY ASSESSMENT FACTORS
The budget profile has a high share of internal revenues and retains the need to use additional funds. According to data provided by the Region and ACRA’s calculations, the revenue side of the Region’s budget may have declined in 2024 compared to the previous year due to lower corporate income tax revenues, but not by more than 4%. The expenditure side of the budget, in turn, may have increased by 17%, while the expected deficit at the end of the year will not exceed 13% of tax and non-tax revenues (TNTR). The current version of the Region’s budget law for 2025 foresees revenues declining, mainly due to non-tax revenues falling after having grown by more than twofold last year, as well as a decline in transfers. It is also planned to slightly reduce expenditures, mainly capital transfers, although they will remain at a moderately high level. The deficit for 2025 may amount to 16% of TNTR, which the Region plans to finance almost entirely at the expense of borrowings, including commercial loans.
According to ACRA’s calculations, the averaged1 ratio of the Region’s current account balance to current revenues may be 9.2% for 2021–2025. The current account balance will continue to be positive in 2025, which indicates that current revenues are sufficient to finance the entire volume of current expenditures. At the same time, the negative modified budget deficit (MBD) indicates that capital expenditures will need to be financed using borrowed funds or by spending available liquidity.
The share of capital expenditures in the Region’s total expenditures averaged for 2021 to 2025 (excluding subventions) may amount to 17.6%. Annually, capital expenditures are more than 90% financed by the Region’s internal funds, which, in the Agency’s opinion, may serve as an additional reserve amid declining budget expenditures. The averaged share of TNTR in the Region’s revenues over the aforementioned period will amount to 96.6% (excluding subventions). The ratio of the MBD to current revenues averaged for 2021–2025 is expected at -7.1%. ACRA uses a positive adjustment for this indicator, taking into account the expected low debt load of the Region at the end of the current year.
The quality assessment of the Region’s budget profile is high. There are no known cases of violation of budget legislation; the amount of lost tax revenues due to the use of tax benefits is insignificant for the Region’s budget. The budget law provides for additional transfer of personal income tax revenues to municipal budgets. The budget process is characterized by moderate accuracy of planning and dominance of conservative expectations. Deviations of actual revenues from the forecast indicators provided for in the first version of the budget are observed mainly in transfers and corporate income tax revenues due to the volatility of the external environment. These deviations occur for reasons beyond the Region’s control.
Low debt load and minimal refinancing risks. The volume of the Region’s debt increased by 7% in 2024 amid the receipt of an infrastructure budget loan, which corresponds to a low level (3% of current revenues). The current version of the budget law states that the Region plans to significantly increase its debt in 2025, mainly by resorting to commercial loans. The Region’s debt to current revenues ratio may be around 18.1% at the end of the year, which, however, still allows the Region’s debt load to be assessed as low. Since 2010, the Region’s debt has only been made up of budget loans and guarantees, which accounted for 94% and 6% of debt as of the start of 2025, respectively.
The Region plans to obtain bank loans in 2025, which will result in a change to the structure of debt. This somewhat increases the refinancing risks. However, they remain minimal due to the low debt load and constant presence of balances in the Region’s accounts.
The debt repayment schedule is balanced — as of January 1, 2025, the Region had to repay 6% of its debt in 2025. Interest expenditures are not burdensome for the Region — the averaged level of interest expenditures for 2021–2025 will be around 1% of the Region’s total budget expenditures (excluding subventions). The ratio of the Region’s debt to GRP will amount to 2.2% by the end of 2025.
The quality assessment of the Region’s debt load is determined by the Agency at the highest level due to the long weighted average debt repayment period, significantly exceeding 3.5 years, the insignificant debt load of municipalities, and the Region’s balanced debt policy based on the use of long-term debt instruments. The current account balance is primarily positive. The financial debt of public sector companies is insignificant and amounted to 4% of TNTR as of September 30, 2024.
High accumulated liquidity of the budget. The size of funds in the Region’s accounts declined last year due to the expenditure of a significant volume of liquidity to finance the budget deficit. Nevertheless, as of January 1, 2025, the volume of liquidity was more than four times higher than the Region’s debt as of the same date.
The liquidity ratio of the Region’s budget (according to ACRA’s methodology) may have been around 163% in 2024, and this year it may decline to 91%. However, ACRA applied a positive adjustment to this indicator because the Region regularly places accumulated liquidity in deposits.
The quality assessment of the Region’s budget liquidity is high. According to the Region, the budget did not have any overdue payables as of January 1, 2025. There is information on failed attempts to purchase credit lines from October to November last year. The Department of Finance of the Tyumen Region and the Federal Treasury Department signed an agreement on the provision of a budget loan to the Region in 2024 to replenish its balances in the single budget account, however, because there was no need to obtain short-term loans to finance cash gaps, the facility was not used.
The Region’s socioeconomic indicators are moderately high. The Region’s GRP per capita has been high over the past five years, and the average of this indicator exceeded the national average by 1.2x in 2018–2021. The ratio of these indicators, averaged for 2019–2022 is moderately high, and, according to the Region’s projections and ACRA’s calculations, will remain at this level over the forecast period.
The ratio of the averaged wage for 2020–2023 to the averaged regional subsistence minimum for the same period exceeds 3.5. The unemployment rate averaged for 2020–2023 calculated as per the ILO’s methodology was 3.6%.
The Region’s economy is based on hydrocarbon production and processing, which generate most of the tax revenues. According to ACRA’s calculations, the oil products industry provided the largest share of tax revenues averaged over 2020–2023 — 29%. Another significant share of tax revenues is contributed by production of oil and associated gas, the public sector, R&D, construction, wholesale, and land and pipeline transport sectors.
There is an agreement between the public authorities of the Region and the autonomous okrugs, which regulates regional social, infrastructure and investment programs, and is intended to benefit the entire population of the Region, including the residents of KMAO–Yugra and YNAO. The agreement is valid until December 31, 2035 and may be extended. According to the agreement, 29.5% of profit tax revenues collected in KMAO–Yugra and YNAO are transferred to the Region’s budget to fund the abovementioned programs.
1 Hereinafter, averages are calculated according to the Methodology for Assigning Credit Ratings to Regions and Municipal Entities of the Russian Federation.
key assumptions
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Execution of the Region’s budget in 2025 according to the parameters set out by the current version of the budget law;
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Financing the expected deficit using commercial borrowings;
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Maintaining the agreement between the public authorities of the Region and the autonomous okrugs and retaining the current distribution proportion of corporate income tax revenues collected in KMAO–Yugra and YNAO.
potentiaL outlook or rating change factors
The Stable outlook assumes that the credit rating will highly likely stay unchanged within the 12 to 18-month horizon.
A negative rating action may be prompted by:
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Steady decline in the budget’s operational efficiency;
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Decline in liquidity;
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Debt load exceeding 30% of current revenues coupled with higher refinancing risks;
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Substantial change to inter-budget relations in the Russian Federation.
issue ratings
There are no outstanding issues.
regulatory disclosure
The credit rating has been assigned under the national scale for the Russian Federation based on the Methodology for Assigning Credit Ratings to Regions and Municipal Entities of the Russian Federation and the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities.
The credit rating of the Tyumen Region was published by ACRA for the first time on November 21, 2017. The credit rating and its outlook are expected to be revised within 182 days following the publication date of this press release as per the Calendar of sovereign credit rating revisions and publications.
The credit rating was assigned based on data provided by the Government of the Tyumen Region, information from publicly available sources (the Ministry of Finance, the Federal State Statistics Service, and the Federal Tax Service), and ACRA’s own databases. The credit rating is solicited and the Government of the Tyumen Region participated in its assignment.
In assigning the credit rating, ACRA used only information, the quality and reliability of which were, in ACRA’s opinion, appropriate and sufficient to apply the methodologies.
ACRA provided no additional services to the Government of the Tyumen Region. No conflicts of interest were discovered in the course of credit rating assignment.
