Regions & Municipalities


Analytical commentary

Analysis of the latest data1 on execution of nonconsolidated regional budgets
According to the latest reporting, in 2023 the revenues of the regions of the Russian Federation2 amounted to RUB 19,246 bln, which was 9.5% higher than in 2022 (RUB 17,572 bln). The highest growth of revenues was recorded by the Khanty-Mansi Autonomous Okrug (+39.8%), Tyumen Region (+33.2%), Leningrad Region (+31.3%), Republic of Adygea (+24.6%), and the Smolensk Region (+23.6%). The largest decline in revenues was recorded by the Nenets Autonomous Okrug, (-21.1%), the Republics of Mordovia, Ingushetia and Khakassia (-19.4%, -18.1%, and -14.1%, respectively) and the Kemerovo Region — Kuzbass (-13.4%). In nominal terms, the highest increase of revenues was achieved by Moscow (+RUB 556 bln) and the Moscow Region (+RUB 149 bln), while the Kemerovo Region — Kuzbass experienced the biggest decline in budget revenues (-RUB 42 bln).

1 According to the Single Portal for the Budget System of the Russian Federation (SPBS)
2 Excluding the Donetsk People’s Republic, Lugansk People’s Republic, Zaporozhye Region, and the Kherson Region, excluded from calculations for comparability of data for the analyzed period, as well as excluding the federal territory of Sirius; total revenues for 2023 amounted to RUB 19,923 bln taking into account these territories.

Figure 1. Regions with the highest relative indicators of growth and decline in revenues, RUB bln

Sources: SPBS, ACRA

The lion’s share of the regions’ total revenues came from corporate income tax (their share was 30.9%), while the volume of funds received increased by 27.7% (to RUB 5,956 bln) year-on-year. Growth in nominal terms was RUB 1,292 bln. The most substantial growth was recorded in the Zabaikalsky Krai (+205.0%), Khanty-Mansi Autonomous Okrug (+173.2%), and the Jewish Autonomous Okrug (+116.6%). Corporate income tax revenues declined in nine regions, with the biggest falls taking place in the Republic of Khakassia (-52.4%), Kemerovo Region — Kuzbass (-29.1%), and the Nenets Autonomous Okrug (-27.4%).

Proceeds from personal income tax accounted for 25.8% of the regions’ total revenues in 2023, or around RUB 4,959 bln. Proceeds from this type of tax grew by 12.1% compared to 2022. Personal income tax proceeds increased in all regions except the Republic of Ingushetia, where a 38.9% decline took place. The Primorksy Krai, Republic of Chuvashia and the Kurgan Region experienced the most noticeable growth in terms of this type of tax revenue — 31.4%, 25.1%, and 24.1%, respectively.

A significant share (18.1%) of the regions’ revenues came from transfers from other budgets. In 2023, the volume of these transfers fell by 11.0% (or RUB 433 bln in nominal terms3). Gratuitous income declined in 65 regions, most noticeably in the Nenets Autonomous Okrug (-54.1%), Samara Region (-44.7%), and the Republic of Mordovia (-38.8%). The leader in terms of growth of transfers was the Belgorod Region, where they increased by 51.1% (+RUB 16.5 bln).

3 In 2023, around RUB 539 bln of budget transfers were sent from the federal budget to the budgets of the Donetsk People’s Republic, Lugansk People’s Republic, Zaporozhye Region, and the Kherson Region. Taking this into account, the total volume of transfers from different budgets increased by 2.7% in 2023 year-on-year.

Figure 2. Corporate income tax and personal income tax accounted for more than half of the regions’ total revenues in 2023

Sources: SPBS, ACRA

Among the analyzed regions4, the Republic of Ingushetia had the largest share (87.1%) of transfers from other budgets in 2023. It was followed by the Chechen Republic (83.3%), the Tyva Republic and the Republic of Dagestan (82.9% and 76.3%, respectively), and the Kabardino-Balkarian Republic (71.0%). In 13 regions, the share of this type of revenue exceeded 50% of total revenues for the year. The smallest share of transfers from other budgets was typical for Moscow (0.9%). It is followed by St. Petersburg (2.9%), and the Tyumen, Sakhalin and Leningrad Regions (3.6%, 3.7% and 7.1%, respectively). In total, eight regions had transfers amounting to less than 10% of their revenues in 2023.

The total volume of expenditures of the analyzed regions as of January 1, 2024 amounted to RUB 19,509 bln, which is 11.1% higher than in 2022 — RUB 17,562 bln5. According to the results of last year, expenditures decreased in only 11 regions, while in four regions, including the Karachay-Cherkess Republic, the Republic of Dagestan, the Republic of Ingushetia, and the Samara Region, the decrease exceeded 10%. Five regions (the Krasnodar Krai, KMAO, the Smolensk Region, the Yamalo-Nenets Autonomous Okrug, and the Republic of Adygea) increased their expenditures by about a quarter or more year-on-year.

4 In the Zaporozhye and Kherson Regions, as well as in the Donetsk and Lugansk People’s Republics, the share of transfers from other budgets in the revenues exceeded 80.0% in 2023.
5 Taking the new regions into account, expenditures were 15.0% higher than in 2022.

Figure 3. Regions with the highest relative increase/decrease in expenditures, %

Sources: SPBS, ACRA

In 2023, expenditures in the analyzed regions increased by a total of RUB 1.9 tln. In nominal terms, the most noticeable growth was in the following sections: Housing and Utility Services (+RUB 552 bln), National Economy (+RUB 509 bln) and Education (+RUB 422 bln). National Defense (+77.2%), Housing and Utility Services (+33.7%) and General National Matters (+24.9%) showed the strongest growth in relative terms. Expenditures for Healthcare and Public Debt Servicing decreased by 3.9% and 9.2%, respectively.

Figure 4. Growth of expenditures by sections, RUB bln

Sources: SPBS, ACRA

In 2023, the National Economy section dominated total budget expenditures (23.7%). Education and Social policy accounted for 20% of expenditures, while Housing and Utility Services and Healthcare accounted for 11.2% and 9.6%, respectively.

Figure 5. Three expenditure sections covered about two-thirds of the total expenditures in 2023

Sources: SPBS, ACRA

By the end of 2023, budget deficits were observed in 58 regions, totaling to over RUB 503 bln (excluding the budget deficit of Moscow — RUB 313 bln). The number of regions that ended the year with a deficit increased compared to 2022, when there were 49 of these regions. The total surplus of the regions with a surplus amounted to RUB 241 bln. The largest budget surplus in nominal terms was in the Sverdlovsk Region — RUB 50.8 bln, or 13% of tax and non-tax revenues (TNTR). It was followed by the Leningrad Region (RUB 37.1 bln, or 16% of TNTR) and the KMAO (RUB 30.6 bln, or 8% of TNTR). Regions with the largest budget deficit by the end of 2023 included Moscow (-RUB 189.9 bln, or 5% of TNTR), St. Petersburg (-RUB 26.5 bln, or 2% of TNTR), and the Republic of Tatarstan (-RUB 23.5 bln, or 6% of TNTR). Leaders in terms of the ratio of budget deficit to TNTR are the Chechen Republic (58%), the Jewish Autonomous Okrug (41%), and the Republic of Ingushetia (28%).

Figure 6. Regions with the largest budget surplus and deficit, RUB bln

Sources: SPBS, ACRA

Generally, for the analyzed regions, 2023 was marked by a less significant increase in revenues than 2022. Total revenues grew by 9.5%, whereas a year earlier the growth exceeded 12.0%. Despite a more noticeable increase in TNTR (by 15.5% compared to a 13.2% increase a year earlier), the regions received 11.0% less transfers6. Taking into account these factors, as well as an 11.1% increase in annual expenditures, the total budget deficit of the regions amounted to RUB 263 bln in 2023, while an aggregate surplus of RUB 10 bln was observed in 2022.

6 Excluding the new regions.

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Ilya Tsypkin
Associate Director, Head of Municipal Ratings, Sovereign and Regional Ratings Group
+7 (495) 139 03 45
Elena Anisimova
Senior Director — Head of Sovereign and Regional Ratings Group
+7 (495) 139 04 86
Svetlana Panicheva
Head of External Communications
+7 (495) 139 04 80, ext. 169
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