The credit rating of the Republic of Tatarstan (hereinafter, the Region) is based on its low debt load with minimal refinancing risks, as well as a strong budget profile with high operational efficiency. High economic indicators provide additional support to the rating.
The Region is part of the Volga Federal District (VFD) and is home to 4 mln people (around 3% of the country’s population). The Region’s gross regional product (GRP) amounted to RUB 4,583 bln in 2023, which is 11% higher in nominal terms and 4% higher in real terms than in the previous year. According to the Region’s estimates, its GRP could have amounted to RUB 5,203.5 bln in 2024.
KEY ASSESSMENT FACTORS
Strong budget profile and high operational efficiency indicators. The Region ended 2024 with a surplus equivalent to 3% of its tax and non-tax revenues (TNTR), which was almost entirely used to service loans obtained from the senior budget.
According to the current budget estimate, budget revenues in 2025 may be slightly lower than the previous year’s figure. Corporate income tax revenues, revenues from use of property, as well as taxes, duties and regular payments for using natural resources will decline, while proceeds from personal income tax and other types of taxes will continue to grow. Budget expenditures are planned to grow by 3% (current expenditures will increase by 16% and capital expenditures will decline by 9%). This year’s budget deficit is expected at 4% of TNTR and it will be fully covered using accumulated account balances.
However, taking into account the intermediate budget execution for 10 months of this year, ACRA assumes that the revenue side may not decline because the fall in corporate income tax revenues may be less serious than stipulated by the current plan, and personal income tax revenues may increase to a greater extent. If other budget parameters remain unchanged, the deficit may be below the expected level, or a surplus will be achieved.
The averaged1 ratio of the current account balance to current revenues for 2022–2026 will be 38%. In 2025, the current account balance will continue to be positive, which indicates that it is able to finance all current expenditures and a significant share of capital expenditures using current revenues.
The averaged share of capital expenditures in total expenditures (excluding subventions) for 2022–2026 will amount to 47%.
The qualitative assessment of flexibility of budget expenditures is the highest possible. Capital expenditures are mostly funded by the Region at its own expense. The current account balance, after interest income and expenditures, is regularly positive, which makes it possible to cover interest expenditures using current revenues. The modified free cash flow is quite volatile (in some years, it has been negative, but its absolute value was small), which explains the Region’s periodic need to partially finance capital expenditures using additional funds. The infrastructure of the Region is relatively developed compared to other regions of the Volga Federal District and Russia as a whole.
The averaged share of TNTR in the Region’s revenues (excluding subventions) will equal 85% for the same period.
The ratio of the modified budget deficit (MBD) to current revenues averaged over 2022–2026 will be 2.6%. ACRA notes that the MBD is expected to be positive by the end of 2025, which indicates the absence of the need to use additional financing for capital purposes this year.
The qualitative assessment of budget profile corresponds to the first category. There are no 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. In 2024, the volume of budget revenues lost due to the provision of benefits amounted to slightly less than 3% of TNTR, and is estimated at around 2.4% of TNTR for 2025. The Region transfers tax revenues, including part of the proceeds from taxes on total income (as part of the simplified taxation system), to lower-level budgets. The Region applies a conservative budget planning approach and the actual deficit is frequently much lower than the target indicators, which is often due to the volatility of corporate income tax revenues.
1 Hereinafter, averages are calculated according to the Methodology for Assigning Credit Ratings to Regions and Municipal Entities of the Russian Federation.
Low debt load and non-commercial nature of debt. In 2024, the Region’s debt amounted to RUB 112.1 bln. The lion’s share of the debt portfolio (81%) was budget loans, while the remaining part was guarantees, including guarantees issued in 2023 and 2024 in favor of JSC TatDorTransNeft (founder is the Republic of Tatarstan) to cover funds to build roads in the Region, and a guarantee issued in 2005 in favor of KAMAZ PTC (ACRA rating: AA-(RU), outlook Stable) for its obligations to the federal budget. As of January 1, 2025, the Region had a balanced debt repayment schedule and had to repay just over 2% of its debt in 2025.
As of November 1, 2025, the Region’s debt had declined by 12% compared to the indicator recorded at the start of the year. Since the start of 2025, under a guarantee issued in 2024 for the principal amount of RUB 12.0 bln, the borrower has fulfilled all its obligations to the lender, and some budget loans have been restructured in accordance with Decree of the Government of the Russian Federation No. 79. In addition, since the beginning of the year, the volume of a guarantee provided to KAMAZ PTC has declined by approximately RUB 0.9 bln due to currency revaluation.
The Region has to repay less than 2% of its debt by the end of this year.
By the end of the year, the Region’s debt-to-current income ratio may be 20%. Interest expenditures are not burdensome for the Region: the average interest expenditures for 2022–2026 will be significantly lower than 1% of total budget expenditures (excluding subventions).
The qualitative assessment of the Region’s debt profile corresponds to the second category. According to the repayment schedule as of January 1, 2025, the weighted average maturity of debt exceeded four years. Debt is mainly represented by budget loans. The current account balance is regularly positive and significant in absolute terms. The debt load of municipalities is moderate, with the city of Kazan accounting for the entire debt. As of October 1, 2025, the financial debt of public sector enterprises did not exceed 3% of the Region’s TNTR, and their overdue accounts payable were equivalent to 3.6% of TNTR. The Region’s debt policy helps to minimize refinancing risks using long-term budget loans.
Sufficient amount of accumulated liquidity. As of January 1, 2025, the volume of balances in the Region’s accounts remained virtually unchanged compared to the volume at the beginning of last year and covered almost 70% of the Region’s public debt. The less significant budget deficit (or surplus) expected by ACRA by the end of 2025 will allow the Region to retain most of its available liquidity.
The Region’s liquidity ratio will considerably exceed 140% at the end of 2025.
The qualitative assessment of budget liquidity corresponds to the second category. Over the past 12 months, average account balances have exceeded monthly budget expenditures by just under two times. The Region does not need to resort to additional financial instruments because account balances are significant. The Region has not attracted short-term loans from the Federal Treasury Department to replenish its funds in the past period of the current year. The Region does not use credit lines as an instrument of its own liquidity. The risks of refinancing debt obligations are assessed as minimal given the non-commercial nature of the debt.
The Region’s economy is developed and moderately focused on the extraction of commodities. According to ACRA’s calculations, the oil and gas industry generated the maximum share (20%) of tax revenues in 2021–2024 (averaged over this period). The wholesale and retail trade sector generated around 12% of tax revenues, and the manufacturing sector formed another 24% (including more than 7% contributed by chemical production).
The ratio of the Region’s per capita GRP to the national indicator averaged over 2020–2023 was 107%. Taking into account the Region’s expectations with regard to GRP in 2024, this ratio for 2021–2024 will remain almost the same. The monthly wage to subsistence minimum ratio averaged over 2021–2024 far exceeds 4x. The unemployment rate averaged for the same period and calculated according to the ILO’s methodology is low at 2.0%. The unemployment rate was 1.8% in 2024.
KEY ASSUMPTIONS
-
2025 budget execution more optimistic than the current budget law in terms of TNTR;
-
No need for commercial debt.
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:
-
The need to provide extraordinary support to public sector companies and financial organizations;
-
Substantial changes in inter-budget relations in the Russian Federation;
-
Persisting growth of the budget’s need for debt financing;
-
Stable growth of the Region’s debt above 35% of current revenues.
RATING COMPONENTS
Standalone creditworthiness assessment (SCA): aaa.
Support: none.
ISSUE RATINGS
There are no outstanding issues.
regulatory disclosure
The credit rating has been assigned to the Republic of Tatarstan based on the following methodologies: the Methodology for Assigning Credit Ratings to Regions and Municipal Entities of the Russian Federation to calculate the SCA and determine the credit rating and the credit rating outlook of the Republic of Tatarstan 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 Republic of Tatarstan assigned under the national scale for the Russian Federation was published by ACRA for the first time on November 17, 2017.
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 Republic of Tatarstan, 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 Republic of Tatarstan as of November 1, 2025.
The credit rating is solicited and the Republic of Tatarstan 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 Republic of Tatarstan during the year preceding the rating action.
No conflicts of interest were discovered in the course of credit rating assignment.
