The credit rating of the Altai Krai (hereinafter, the Region) is based on a low debt load coupled with minimal risks of refinancing obligations and stable indicators of the budget profile. The Region’s moderate economic development indicators, significant annual volume of transfers in the structure of the Region’s revenues, as well as the budget’s growing need to use additional funds have a constraining effect on the rating.
The Altai Krai is located in the Siberian Federal District and borders three Russian regions and Kazakhstan. The Region is home to around 2.1 mln people. According to the Region’s estimates, its gross regional product (GRP) was RUB 1.2 tln in 2024.
KEY ASSESSMENT FACTORS
Positive operational efficiency of the budget and a growing need for additional financing. The averaged1 ratio of the current account balance to current revenues for 2022–2026 will be 11%. By the end of 2025, the current account balance is also expected to be positive, although well below the averaged figure for the period. Positive operational efficiency indicates that the Region’s current expenditures are fully covered by its current revenues without the need for additional financing.
The averaged share of capital expenditures in total expenditures for 2022–2026 will be 24%, while the qualitative assessment of the flexibility of budget expenditure corresponds to the second category. Capital expenditures are mainly financed by the regional budget. The current account balance after taking into account interest income and expenditures is consistently positive. The modified free cash flow is volatile, which explains the budget’s periodic need for additional funds to finance part of capital expenditures.
The averaged share of tax and non-tax revenues (TNTR) for 2022–2026 in the Region’s total revenues (excluding subventions) will amount to 64%, which indicates a moderately low dependence on the higher budget. At the same time, ACRA notes that in separate years, the volume of transfers has exceeded half of the regional budget’s revenues. The ratio of the averaged modified budget deficit (MBD) to current revenues for the above period is expected to be -7%. The budget’s need to raise additional funds is growing. According to the Agency’s forecasts, the MBD for 2025 will amount to about 16% of the Region’s current revenues. However, given the low debt load of the Region, ACRA has adjusted the averaged MBD to current revenue ratio to a higher category.
The qualitative assessment of the budget profile corresponds to the first category. No cases of violation of budget legislation by the Region have been identified. The Region additionally transfers to lower budgets a portion of revenues from personal income tax, from the tax levied in connection with the application of the simplified taxation system, from the tax on the extraction of common minerals, as well as a portion of revenues from other types of income. The volume of lost tax revenues associated with the application of tax incentives in 2024 was insignificant for the Region’s budget. The Agency notes significant annual deviations of some actual budget revenues from the targets.
The Region’s budget was executed with a deficit of 3% of the TNTR, which was almost entirely financed by obtaining budget loans.
The latest data on the Region’s budget execution as of November 27, 2025 indicates considerable growth of expenditures, which increased by 21% compared to the indicator for the same period in 2024. Budget revenues had increased by 14% as of the aforementioned date, with TNTR growth amounting to 13%. TNTR growth was driven by personal income tax revenues, which increased by 19% year-on-year, as well as growing revenues from taxes on goods and services (+25%) and proceeds from placing temporarily idle funds (+55%). Transfers are 15% higher than during the same period of last year. The budget is currently being executed with an intermediate deficit.
According to the current version of the Region’s budget law for 2025–2027, this year revenues will increase by 12% vs. 2024 (TNTR will grow by 10% and the volume of transfers will increase by 15%). It is expected that the expenditure side of the Region’s budget will increase by 25%. Significant growth will be demonstrated by both current expenditures (+20%) and capital expenditures, which will increase by more than 40%. The planned deficit will amount to 22% of TNTR (taking into account the significant volume of account balances) and will be financed primarily using accumulated liquidity.
The Region’s budget law for 2026–2028 envisages a further 4% increase in revenues compared to the current year. TNTR is expected to increase by 5%, while gratuitous receipts are expected to increase by 2%. A 2% reduction in expenditures is planned. The Region intends to cover the expected 10% TNTR deficit using remaining liquidity and borrowed funds.
1 Hereinafter, averages are calculated according to the Methodology for Assigning Credit Ratings to Regions and Municipal Entities of the Russian Federation.
Account balances allow the entire budget deficit expected this year to be financed. At the end of 2024, the volume of funds accumulated by the Region remained virtually unchanged compared to the figure at the beginning of the year. These account balances will allow the Region to finance the majority of the projected budget deficit for the year.
The budget liquidity ratio will amount to 94% by the end of 2025. ACRA has adjusted this indicator to a higher category because the Region regularly receives a significant volume of interest revenues from operations related to managing cash balances.
The qualitative assessment of budget liquidity corresponds to the second category. Debt refinancing risks are assessed as minimal due to the non-commercial nature of the debt and the extension of its repayment periods against the background of partial debt restructuring. The volume of accounts payable did not exceed RUB 0.9 bln as of October 1, 2025. The Region has no open credit lines. There are no plans to borrow short-term budget loans from the Federal Treasury Department this year.
Low debt load with minimal debt refinancing risks. By the end of 2024, the volume of the Region’s debt had increased by a little more than a quarter compared to the indicator for 2023 and amounted to RUB 14.8 bln. As of January 1, 2025, the Region’s debt included only budget loans. Based on the repayment schedule effective as of the same date, the Region had to repay 7% of its obligations in 2025 and 8% in 2026.
By November 1, 2025, the amount of the Region’s debt had slightly declined. The debt portfolio still included budget loans only. The updated debt repayment schedule includes the repayment of 5% of debt by the end of this year. In the future, the Region will have to repay no more than 7–8% of its debt annually.
The Region’s debt load remains low. If part of the expected deficit is covered by borrowed funds, the ratio of debt to current revenues will be 12% by the end of 2025; ACRA does not expect this indicator to grow significantly in 2026.
Interest expenditures are not burdensome for the Region due to the non-commercial nature of debt: averaged interest expenditures for 2022–2026 are well below 1% of total budget expenditures (excluding subventions).
The qualitative assessment of the Region’s debt profile corresponds to the first category. The weighted average debt repayment period significantly exceeds four years. The debt portfolio includes only budget loans. The operational efficiency of the budget is consistently positive. The Region had no overdue accounts payable during the first three quarters of this year. The debt load of municipalities is very low: by the end of 2024, the ratio of debt to TNTR of municipalities was 2%. The volume of financial debt of public sector enterprises and their overdue accounts payable as of October 1, 2025 was insignificant for the regional budget. The Region has concluded one concession agreement for the construction of a sports facility; the Region makes an annual payment under this agreement.
Low debt load with minimal debt refinancing risks. By the end of 2024, the volume of the Region’s debt had increased by a little more than a quarter compared to the indicator for 2023 and amounted to RUB 14.8 bln. This is explained by the borrowing of another budget loan with a long repayment period. As of January 1, 2025, the Region’s debt included only budget loans. Based on the repayment schedule effective as of the same date, the Region had to repay 7% of its obligations in 2025 and 8% in 2026.
Diversified economy with moderate economic development indicators. The ratio of the Region’s per capita GRP averaged over 2020–2023 to the corresponding national average is 46%. According to the Region’s current projections and ACRA’s expectations, this ratio remains unchanged for 2021–2024.
The ratio of averaged wage and the regional subsistence minimum for the working-age population exceeded 3.0 in 2021–2024. The averaged unemployment rate for the same period is 3.7% (compared to 3.4% in 2024).
A significant share of the Region’s GRP is generated by the agricultural sector, so the relative size of its economy is small. In 2023, the share of agriculture in the Region’s GRP was about 12%, the share of manufacturing industries in GRP exceeded 20%, and the share of public sector industries was more than 19%.
According to ACRA’s estimates, the largest volume of tax revenues in the Region is generated by the manufacturing sector, whose share exceeded 32% last year. The manufacturing sector is significantly diversified. The food industry, production of coke and petroleum products, metal production, and production of electronics are well developed. More than 19% of tax revenues came from industries belonging to the Region’s public sector. A significant amount of tax revenues also comes from the wholesale and retail trade sector, which accounted for about 14% as of the end of 2024. In the nine months of this year, the indicator of the Region’s tax revenue diversification changed insignificantly.
KEY ASSUMPTIONS
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Execution of the regional budget in line with the updated law;
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Using most of the accumulated liquidity to cover the projected budget deficit;
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Raising borrowed funds to cover projected deficits in 2025–2028.
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 positive rating action may be prompted by:
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Faster growth of the Region’s economic development indicators;
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Lower need of the budget for additional funds, which contributes to saving accumulated liquidity.
A negative rating action may be prompted by:
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Steady decline of the budget’s operational efficiency;
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Debt to current revenue ratio exceeding 35%;
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Consistent decline of the share of TNTR in the Region’s total revenues;
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Significantly lower volume of available liquidity.
RATING COMPONENTS
Standalone creditworthiness assessment (SCA): aa-.
Support: none.
ISSUE RATINGS
There are no outstanding issues.
REGULATORY DISCLOSURE
The credit rating has been assigned to the Altai Krai based on the following methodologies: the Methodology for Assigning Credit Ratings to Regions and Municipal Entities under the National Scale for Russian Federation to calculate the SCA and determine the credit rating and the credit rating outlook of the Altai Krai under the national scale for the Russian Federation and the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities to ensure consistent and uniform application of ACRA’s methodologies, rating scales, models, and key rating assumptions.
The credit rating of the Altai Krai assigned under the national scale for the Russian Federation was published by ACRA for the first time on March 19, 2020.
The credit rating and its outlook are expected to be revised within 182 days as per the Calendar of sovereign credit rating revisions and publications.
The credit rating was assigned based on data provided by the Altai Krai, 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 rating analysis was performed using the RAS accounting (financial) statements of the Altai Krai as of January 1, 2025.
The credit rating is solicited and the Altai Krai 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 Altai Krai during the year preceding the rating action.
No conflicts of interest were discovered in the course of credit rating assignment.
