The credit rating of the Republic of Mordovia (hereinafter, the Region) has been upgraded due to the maintenance of a certain level of liquidity and the improvement of budget profile indicators due to the completion of 2025 with a budget surplus, as well as a change in the qualitative liquidity assessment as a result of debt restructuring. A deficit-free budget is also planned for 2026–2027, which implies that the assessments will remain at the current level.
The Republic of Mordovia is part of the Volga Federal District. It has a population of around 0.8 mln (0.5% of Russia’s population). According to the Region’s estimates, its gross regional product (GRP) was more than RUB 500 bln in 2025 (annually around 0.25% of the GRP of Russia’s regions).
KEY ASSESSMENT FACTORS
Moderately low debt load. The Region’s debt declined by 14% in 2025 compared to 2024, to RUB 26.2 bln. During the year, the Region had budget loans worth RUB 2.8 bln written off. According to the debt repayment schedule valid as of the start of this year, the Region will have to repay no more than 9% of its debt annually.
The Region’s debt load corresponds to a moderately low level. The ratio of debt to current revenues was 38% in 2025, and, judging by the current budget parameters, may decline by the end of this year.
The Region’s interest expenditures are low thanks to the non-commercial nature of debt — the ratio of averaged[1] interest expenditures to total expenditures for 2022–2026 (excluding subventions) will amount to less than 1%. The ratio of the Region’s debt to projected 2026 GRP will be less than 5%.
The qualitative assessment of the debt profile corresponds to the third category. Following the restructuring of debt obligations, the weighted average debt repayment period began to significantly exceed four years. The debt portfolio consists entirely of budget loans. Prior to 2022, the Region’s debt policy did not help minimize debt refinancing risks, and around half of the Region’s debt portfolio was commercial liabilities that had to be repaid within one year and there were cases of forced budget loan restructuring. The operational efficiency of the budget was largely positive, which indicates that current expenditures were financed using current revenues largely without resorting to borrowings. The debt load of municipal entities is moderately high, most of which (64%) is accounted for by the city of Saransk, which is characterized by a high debt load (the ratio of debt to tax and non-tax revenues (TNTR) of Saransk exceeded 90% at the end of 2024). The financial debt of the public sector enterprises was around RUB 4.1 bln as of October 1, 2025. The budget’s overdue payables were insignificant as of October 1, 2025.
Growth of budget liquidity. In 2025, the Region increased its account balances by executing the budget with a surplus. Over the past 12 months, the size of balances was on average comparable to the regional budget’s monthly expenditures.
The budget liquidity ratio was 41% by the end of 2025, and by the end of the current year it is expected to be over 160% for the first time (a downward adjustment was applied to exclude the possibility of a one-time factor).
The qualitative assessment of budget liquidity corresponds to the second category. The Region has not obtained any short-term loans from the Federal Treasury Department so far this year. Debt refinancing risks are assessed as low after the restructuring of budget loans and the absence of the need to obtain new debt.
Positive operational efficiency of the budget and a moderate share of internal revenues[2]. The averaged ratio of the Region’s current account balance to current revenues will be 4.5% for 2022–2026. The averaged ratio of capital expenditures to total budget expenditures (excluding subventions) is expected to be 15% for 2022–2026, which is assessed as moderately high. At the same time, the quality assessment of the flexibility of budget expenditures corresponds to the fourth category. Capital expenditures are annually financed largely by the higher budget, which limits the possibility of reducing them if necessary. The current account balance is positive after interest income and expenditures, and therefore interest expenditures can be covered using current revenues. The budget’s modified free cash flow is usually positive.
The averaged share of TNTR in the Region’s revenues (excluding subventions) for 2022–2026 will amount to 64% (due to significant growth in the non-averaged share in 2025 and 2026; a downward expert adjustment has been applied). In the past, the value has indicated significant dependence of the Region on the higher budget. The Agency also notes that in 2022 the Region received a considerable volume of transfers from the higher budget to repay its debt liabilities.
The ratio of the modified budget deficit (MBD) to current revenues averaged for 2022–2026 will be 2%.
The qualitative assessment of the budget profile corresponds to the fifth category and is based on significant deviations of actual internal revenues and budget expenditures from targets, as well as facts of violation of additional agreements concerning budget loans in previous years. The volume of lost tax revenues associated with the use of tax incentives was significant for the budget in 2024.
The financial profile assessment has been adjusted one notch downward due to the sharp growth of some indicators in order to exclude the possibility of exposure to a one-time factor.
Moderate economic profile. The largest share of the Region’s tax revenues was generated by its rather diversified manufacturing industries (the averaged share for 2021–2024 was above 34%). The second largest share came from enterprises that make up the Region’s public sector. The value of the indicator for the above period was 20%. Retail and wholesale trade also accounts for a significant share (around 12%).
The averaged GRP per capita for 2020–2023 was 48% of the national average. The ratio of average wages to the subsistence minimum for 2021–2024 exceeded 3.5. In the past three years, the unemployment rate was comparably low in the Region: the averaged rate was less than 3% in 2021–2024, and it was 2% in 2024.
1 Hereinafter, averages are calculated according to the Methodology for Assigning Credit Ratings to Regions and Municipal Entities under the National Scale for the Russian Federation.
2 In its budget profile analysis, ACRA excluded from 2022 current expenditures the volume of transfers received by the Region to maintain its budget balance and used to repay its debt obligations, since the Agency considers this to be a one-time event.
KEY ASSUMPTIONS
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No need for extraordinary support for the Region’s public sector enterprises;
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Budget execution in 2026–2027 as per the current version of the budget law.
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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Stable growth of the share of TNTR in the structure of budget revenues;
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Long period of growth of the Region’s socioeconomic indicators.
A negative rating action may be prompted by:
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Lower operational efficiency of the Region’s budget;
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Persistent decline in the share of capital expenditures in total budget expenditures (excluding subventions);
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Ratio of debt to current revenues exceeding 60%;
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Share of short-term debt exceeding 30% of total debt.
RATING COMPONENTS
Standalone creditworthiness assessment (SCA): bbb.
Support: none.
issue ratings
There are no outstanding issues.
regulatory disclosure
The credit rating has been assigned to the Republic of Mordovia based on the following methodologies: the Methodology for Assigning Credit Ratings to Regions and Municipal Entities under the National Scale for the Russian Federation to calculate the SCA and determine the credit rating and the credit rating outlook of the Republic of Mordovia 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 Mordovia assigned under the national scale for the Russian Federation was published by ACRA for the first time on November 8, 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 Mordovia, 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 Mordovia as of January 1, 2026.
The credit rating is solicited and the Republic of Mordovia 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 Mordovia during the year preceding the rating action.
No conflicts of interest were discovered in the course of credit rating assignment.
