The shortfall would grow by another RUB 400 billion, or
about $ 5.3 billion, as mounting costs from the war and sanctions continue to
strain regional finances.
Siluanov said the regional budget situation was “difficult.”
“Last year, the deficit grew significantly — from the usual
RUB 200 billion–RUB 300 billion, or about $ 2.7 billion–$ 4 billion, in
consolidated regional budget deficits to RUB 1.5 trillion, or about $ 20
billion,” Siluanov said.
Siluanov said regions must tighten their budgets to bring
the deficit down to RUB 1 trillion, or about $ 13.3 billion.
The largest deficits last year, he said, appeared in
so-called donor regions, where the shortfall was driven by falling profit tax
collections.
Overall, regional budgets lost RUB 480 billion, or about $
6.4 billion, in profit tax revenue, down 8.3% from 2024.
To plug their budget holes, regions spent about RUB 1 trillion, or about $ 13.3 billion, from bank accounts and increased their debt to RUB 3.5 trillion, or about $ 46.7 billion — the highest level in 15 years, the report said.
“Regional budgets are unlikely to see an increase in profit
tax revenue in 2026. Companies’ financial results, which tax revenue depends
on, will remain under pressure from high borrowing costs, logistics expenses and
labor shortages,” Russian experts said. “At the same time, regional spending
will remain high. In addition to paying for social costs, the regions are
forced to finance military recruitment, which consumes about RUB 1 trillion, or
about $ 13.3 billion, a year.”
Mounting economic problems caused by the war and sanctions
have hit the financial stability of Russia’s regions.
By the end of 2025, the combined regional budget deficit had
risen 3.6-fold from the previous year to RUB 1.478 trillion, or about $ 19.7
billion, the highest level on record.