The credit rating of the Kirov Region (hereinafter, the Region) is determined by the low debt load coupled with moderate risks of refinancing liabilities, positive operational efficiency, and a significant share of capital expenditures in total budget expenditures (excluding subventions). The credit rating is limited by the budget’s moderate need to use additional sources of financing and the low level of account balances.
The credit rating’s Positive outlook has been retained in view of ACRA’s expectations regarding a possible decline in the Region’s debt liability refinancing risks in 2026.
The Kirov Region is part of the Volga Federal District (VFD) and is home to around 1% of Russia’s population. According to the Region’s estimates, its gross regional product (GRP) was RUB 719.2 bln in 2025.
KEY ASSESSMENT FACTORS
Low debt load and moderate liability refinancing risks. The Region’s debt amounted to RUB 28.8 bln as of the end of 2025, which is 14% higher than the metric for 2024. In 2025, the Region raised RUB 4.6 bln in the form of bank loans, which are to be fully repaid this year. At the same time, the volume of budget loans declined by RUB 0.9 bln in 2025. As of the start of this year, the debt portfolio was 84% made up of budget loans, while commercial borrowings accounted for the remaining part. According to the debt repayment schedule, the Region will have to repay or refinance 22% of its debt liabilities in 2026, which is the equivalent of 8% of the tax and non-tax revenues (TNR) expected this year. Bank loans account for the lion’s share of the funds to be repaid. The Region will have to repay no more than 7% of its debt annually from 2027 to 2029.
As of March 1, 2026, the volume of the Region’s debt was unchanged, however, part (RUB 1.6 bln) of the longest-term bank loans had been replaced by cheaper short-term loans from the Federal Treasury Department (FTD).
The Region’s debt load is low. As of the end of 2025, the ratio of debt to current revenues of the Region stood at 29%. ACRA assumes that the indicator will be largely unchanged as of the end of this year. Interest expenditures are not burdensome for the Region due to the noncommercial nature of most of the debt — the averaged1 ratio of interest expenditures to total budget expenditures (excluding subventions) for 2022–2026 is less than 1%. The ratio of the Region’s debt to projected GRP will be around 4% as of the end of this year. Both of the abovementioned metrics do not lead to adjustments to the debt load.
The qualitative assessment of the Region’s debt profile corresponds to the second category. The weighted average debt repayment period is well above four years. Debt is mainly made up of budget loans, while the share of bank loans is 16%. Operational efficiency of the budget is consistently positive. The debt load of municipalities is low. The financial debt of the Region’s public sector enterprises was less than RUB 0.2 bln as of three quarters of 2025, while overdue payables of these enterprises amounted to RUB 0.6 bln. The Region’s budget does not have any significant payments under concession agreements or leasing.
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.
Positive operational efficiency of the budget and a moderate need for additional funding sources. The averaged ratio of the current account balance to current revenues for 2022–2026 will be 8%. The current account balance is expected to be positive but insignificant by the end of 2025. The current account balance was positive in 2025 at 7% of the budget’s current revenues. ACRA expects this indicator to remain at a similar level in 2026.
The averaged share of capital expenditures in total expenditures will be 18% for 2022–2026. The qualitative assessment of the flexibility of budget expenditures corresponds to the third category. Capital expenditures are often financed mainly using funds from the senior budget, however, over the past three years the Region has financed most of them independently. The current account balance, after taking into account interest income and expenditures, is consistently positive, allowing interest expenditures to be covered by current revenues. The modified free cash flow is rather volatile (in some years, including 2025, it has been heavily negative), which explains the Region’s periodic need to partially finance capital expenditures using additional funds.
The averaged share of TNTR in the Region’s revenues (excluding subventions) will exceed 64% for the abovementioned period. The ratio of the modified budget deficit (MBD) to current revenues averaged for 2022–2026 is expected to be -4%, which indicates the Region’s moderate need to obtain additional financing. In ACRA’s opinion, the MBD for 2026 will be around 2% of the Region’s current revenues, which will exceed the volume of accumulated funds as of the start of this year and require the Region to resort to borrowing. Nevertheless, the Agency has adjusted this indicator to the second category because the Region has a low debt load.
The qualitative assessment of the budget profile corresponds to the first category. No violations of budget law have been identified. In addition to part of the excise taxes and part of the income tax revenues, the Region transfers to lower budgets the proceeds from tax collected in connection with the application of the simplified taxation system, as well as from corporate property tax. The estimated shortfall of tax revenues due to the application of tax benefits was insignificant for the Region’s budget in 2025. The Agency notes significant deviations of some actual budget revenues from planned indicators.
The Region’s budget was executed with a significant deficit in 2025, which was almost fully covered using borrowings and balances in the Region’s accounts.
As per the budget allocations approved as of March 1, 2026, the Region’s budget revenues will exceed the indicator for last year by 6% in 2026. At the same time, TNTR is expected to increase by 8%, primarily due to proceeds from personal income taxes, taxes on goods and services, and taxes on total income growing by 13%, 13% and 18%, respectively. Transfers will increase by 3% compared to 2025. The Region’s budget expenditures have been approved at the same level as last year, however, current expenditures are expected to grow by 5% in 2026, while capital expenditures are projected to decline by approximately a quarter. The budget deficit at 4% of TNTR will be financed mainly using account balances.
Account balances fell by more than twofold in 2025. Over the past 12 months, the Region’s account balances have covered around 20% of its monthly budget expenditures. As per the approved budget parameters, the remaining funds in the Region’s accounts will be entirely used to finance the expected budget deficit for 2026.
The Region’s budget liquidity ratio will be 19% in 2026.
The qualitative assessment of budget liquidity corresponds to the third category. The Region’s sole issue, which was insignificant in size, was repaid in December 2025. New bond placements are not planned for this year. The Region has already obtained short-term loans from the FTD in 2026 in order to refinance part of its bank debt. The Region’s debt liability refinancing risks are assessed as moderate.
Moderate economic development indicators. According to the Agency’s estimates, the manufacturing sector contributes the largest share of tax revenues among enterprises registered in the Region. This share averaged for 2022–2025 exceeded 36%, and was generated by companies operating in the metallurgy, chemicals, food production and timber industries. The second largest share was contributed by the aggregate of industries that form the Region’s public sector (20%). The wholesale and retail trade sector provided about 14% of tax revenues.
The Region’s economy has a relatively low GRP per capita (GRP averaged for 2021–2024 is 49% of the national average). The ratio of averaged wages to the regional subsistence minimum for 2022–2025 exceeded 3.5. The unemployment rate averaged for the above period was 2.2%, while the local unemployment rate may have declined to 1.6% in 2025 as per the Agency’s calculations.
KEY ASSUMPTIONS
-
Execution of the Region’s budget as per the parameters approved as of March 1, 2026;
-
Using the entire accumulated liquidity to cover the projected budget deficit for 2026;
-
Raising commercial debt to cover budget deficits.
POTENTIAL OUTLOOK OR RATING CHANGE FACTORS
The Positive outlook assumes that the rating will highly likely be upgraded within the 12 to 18-month horizon.
A positive rating action may be prompted by:
-
The Region’s debt liability refinancing risks declining coupled with the debt load remaining below 35%;
-
Growth of the budget’s operational efficiency;
-
Growth of accumulated liquidity by the end of this year.
A negative rating action may be prompted by:
-
Lower share of TNTR in the Region’s total revenues (excluding subventions);
-
Further significant growth of the share of the Region’s short-term debt and a higher debt load;
-
Growing need of the budget for additional funding sources.
RATING COMPONENTS
Standalone creditworthiness assessment (SCA): a-.
ISSUE RATINGS
There are no outstanding issues.
REGULATORY DISCLOSURE
The credit rating has been assigned to the Kirov Region 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 Kirov Region 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 Kirov Region assigned under the national scale for the Russian Federation was published by ACRA for the first time on December 6, 2021.
The credit rating of the Kirov Region 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 Kirov 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 rating analysis was performed using the RAS accounting (financial) statements of the Kirov Region as of March 1, 2026.
The credit rating is solicited and the Kirov 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 Kirov Region during the year preceding the rating action.
No conflicts of interest were discovered in the course of credit rating assignment.
