The credit rating of Saint Petersburg (hereinafter, the City) is based on the low leverage and minimal refinancing risks, high level of economic development, balanced characteristics of the budget profile, and a moderate volume of accumulated liquidity.
Saint Petersburg is a city of federal importance and home to 4% of Russia’s population (fourth place by size of population). In 2024, the City’s gross regional product (GRP) accounted for 7% of the total GRP of Russia’s regions. In 2025, the City’s GRP is estimated to have been RUB 14,115.3 mln. The City ranks second among Russian regions by nominal GDP; it is a major cultural center of the country and the largest transport hub in northwestern Russia. The City has developed maritime, river, railway, air, and motor transport infrastructure.
KEY ASSESSMENT FACTORS
Balanced characteristics of the budget profile and high self-sufficiency of the budget. The averaged1 ratio of the current account to current revenues for 2022–2026 will be just under 20%. ACRA assumes that the size of the current account balance will remain well above zero in 2026. Based on the latest data on the dynamics of budget parameters, the Agency has adjusted the averaged indicator for operational efficiency to the first category. The positive current account balance points to the ability to finance a significant part of the City’s capital expenditures without resorting to additional financing.
The averaged share of capital expenditures in total expenditures (excluding the volume of subventions) for 2022–2026 will be 26%. The qualitative assessment of the flexibility of budget expenditure corresponds to the first category. Capital expenditures are annually almost entirely financed by the City’s budget. The City has a significant level of development of social, transport and utility infrastructure. The current account balance after taking into account interest income and expenditures is regularly positive. The modified free cash flow indicator is quite volatile, which indicates the budget’s periodic need to use additional financing for capital purposes.
The City’s budget has low dependence on transfers from the higher budget — the averaged ratio of tax and non-tax revenues (TNTR) to budget revenues (excluding subventions) will be 98% from 2022 to 2026. The ratio of the averaged modified budget deficit (MBD) to current revenues for the above period is expected to be -6%. The City’s need to use additional funds is assessed by ACRA as moderate. According to the Agency’s projections, the MBD for 2026 will be around 13% of the City’s current revenues. Nevertheless, given the low debt load of the City, ACRA has adjusted the averaged ratio of MBD to current revenues to the second category.
The City’s budget profile assessment corresponds to the first category. No violations of budget laws have been identified. The budget process is characterized by moderate planning accuracy and the predominance of conservative expectations. Deviations of actual revenues from the forecasts stipulated by the first version of the budget law are mostly associated with transfers and corporate income tax revenues due to the volatility of the external environment. These deviations occur for reasons beyond the City’s control. The planned volume of lost tax revenues associated with the application of tax reliefs in 2025 did not pose any risks to the City’s budget.
The City’s budget was executed with a significant deficit in 2025. The main source of financing the deficit was the balances in the City’s accounts.
According to the budget assignments approved as of May 1, 2026, the volume of budget revenues will increase by 4% this year compared to those for 2025. TNTR is expected to grow by 5%. Based on the results of the current year, increases in revenues from personal income tax (+9%), property taxes (+18%), total income taxes (+9%), and corporate income taxes (+5%), are expected. Transfers are planned to be a third lower than last year’s level, due to a decrease in the volume of both current and capital transfers. It is expected that the City’s budget expenditures will increase by 12% by the end of 2026, with current expenditures growing by 16% and capital expenditures remaining at last year’s level. The budget deficit for 2026 will be 13% of TNTR. The City plans to finance it by mainly using borrowings.
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.
Low debt load and minimal debt refinancing risks. By the end of 2025, the City’s debt had decreased by 2% year-on-year to RUB 71.2 bln. Over the past year, the City repaid RUB 22.5 bln in bonds, and also obtained a similar amount of budget loans to finance infrastructure. Bonds accounted for 30% of debt as of the start of 2026, with budget loans making up the remainder. Based on the repayment schedule as of January 1, 2026, the City was to repay 20% of its obligations in 2026 and 18% in 2027.
As of June 1, 2026, the City’s debt had increased by RUB 0.6 bln in budget loans. There were no significant changes to the repayment schedule.
The City’s debt load remains low. The ratio of debt to current revenues was 5% by the end of 2025. According to the City’s plans, the ratio may grow to 18% in 2026.
Interest expenditures are not a burden for the City’s budget: the ratio of interest expenditures to total budget expenditures (excluding subventions) is below 1% for 2022–2026. The ratio of the City’s debt to the GRP projected for the current year will be less than 2%. Both of the abovementioned indicators will not lead to adjustments of the debt load indicator.
The qualitative assessment of the City’s debt profile corresponds to the second category. The City’s debt load is consistently low. The weighted average maturity of debt exceeds four years. The budget’s operational efficiency is consistently positive. According to the City, there were no overdue accounts payable as of January 1, 2026. The debt load of the City’s intracity municipalities was zero at the end of 2025. As of January 1, 2026, the total financial debt of public sector enterprises amounted to RUB 510.7 bln, however, their overdue accounts payable were insignificant. Currently, three public-private partnership projects and 13 concession agreements are being implemented in the City.
Moderate amount of account balances. By the end of 2025, after the financing of the budget deficit, the volume of liquidity accumulated by the City had decreased by three quarters compared to the indicator at the beginning of the year. Over the past 12 months, average account balances were 1.5 times higher than monthly budget expenditures. According to the City’s plans for 2026, account balances will barely be used as sources of financing budget deficits.
Due to the significant decrease in account balances last year, the liquidity ratio in 2026 will be 22%. ACRA has adjusted the budget liquidity ratio to a higher category since the City regularly places temporarily free budget funds in deposits and uses repo transactions to manage liquidity.
The qualitative assessment of the City’s budget liquidity corresponds to the second category. The City is an active participant in the debt market, with three bond issues currently in circulation. The risks of debt refinancing are assessed as minimal. The amount of accounts payable as of January 1, 2026 was insignificant for the City’s budget. Currently, the City has no open credit lines, and short-term budget loans have not been borrowed from the Federal Treasury Department so far this year.
The City’s highly developed economy provides for a diversified tax base. The City’s per-capita GRP is consistently higher than the national average by over 1.5x. The ratio of the Region’s per-capita GRP to the national average per-capita GRP averaged over 2021–2024 was 192%. The ratio of averaged wages to subsistence minimum for the working-age population for 2022–2025 significantly exceeded 4.0. The averaged unemployment rate over the same period was 1.6%.
The economy of the City is well diversified. The largest share of the City’s GRP (33%) by the end of 2024 was formed by the wholesale and retail industries. Over 13% of GRP was generated by real estate transactions. Around 12% was generated by the manufacturing industry. Public sector industries accounted for around 11% of GRP.
The budget’s tax proceeds are also sufficiently diversified: the maximum share of revenues for 2025, according to ACRA’s estimates, was provided by wholesale and retail trade (18%). Around 15% came from a range of manufacturing industries; professional, scientific and technical activities accounted for about 11%; approximately 8% was formed by financial and insurance sectors. The public sector industries collectively accounted for 12% of the City’s tax revenues.
KEY ASSUMPTIONS
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Budget execution in line with the plan approved on May 1, 2026;
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Financing the expected deficits mainly by using borrowed funds.
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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Persistent decline in the operational efficiency of the budget;
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Debt load significantly exceeding 35% of the City’s current revenues;
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Further decline in the volume of available liquidity.
RATING COMPONENTS
Standalone creditworthiness assessment (SCA): aaa.
ISSUE RATINGS
Saint Petersburg, 35002 (ISIN RU000A0ZYKJ1); maturity date: December 4, 2026, issue volume: RUB 25 bln — AAA(RU).
Saint Petersburg, 35003 (ISIN RU000A102A15); maturity date: April 13, 2027, issue volume: RUB 30 bln —AAA(RU).
Saint Petersburg, 35004 (ISIN RU000A102K88); maturity date: September 28, 2028, issue volume: RUB 30 bln — AAA(RU).
Rationale. In the Agency’s opinion, the bond issues of Saint Petersburg are senior unsecured debt instruments, the credit ratings of which correspond to the credit rating of Saint Petersburg. As per ACRA’s methodology, the simplified rating approach was applied to determine the credit ratings, according to which the recovery rate of the issues belongs to category II, and therefore the credit ratings of the issues are equal to the City’s credit rating — AAA(RU).
REGULATORY DISCLOSURE
The credit ratings have been assigned to Saint Petersburg and the issues of Saint Petersburg 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 Saint Petersburg under the national scale for the Russian Federation, Methodology for Assigning Credit Ratings to Financial Instruments under the National Scale for the Russian Federation to determine the credit ratings of the bond issues 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 ratings of Saint Petersburg and the bond issues (ISIN RU000A0ZYKJ1, RU000A102A15, RU000A102K88) of Saint Petersburg assigned under the national scale for the Russian Federation were published by ACRA for the first time on June 27, 2017, December 12, 2017, October 22, 2020, and December 17, 2020, respectively.
The credit ratings were last published on December 26, 2025.
The credit rating of Saint Petersburg and its outlook and the credit ratings of the issues of Saint Petersburg are expected to be revised within 182 days as per the Calendar of sovereign credit rating revisions and publications.
The credit ratings were assigned based on data provided by Saint Petersburg, 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 Saint Petersburg as of May 1, 2026.
The credit ratings are solicited and Saint Petersburg participated in their assignment.
In assigning the credit ratings, 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 Saint Petersburg during the year preceding the rating action.
No conflicts of interest were discovered in the course of credit rating assignment.
