Russian region stops paying salaries to public sector workers
At the beginning of 2026, the Republic of Khakassia found itself in a state of acute financial collapse caused by a critical drop in revenues from the coal industry.
This was reported by the local outlet NotaBene.
Due to an empty treasury, the region has suspended salary payments to employees of several public institutions, including forensic medical bureaus, psychiatric hospitals, blood centers, and the 112 emergency services. The situation has become systemic, affecting both republic-level healthcare facilities and the education sector in the regional capital, Abakan.
In addition to wage arrears, the republic has seen mass account freezes at educational institutions due to their inability to settle payments with suppliers. In December 2025, the accounts of around 30 schools and kindergartens were blocked, effectively halting payments for food supplies, utilities, and heating fuel. During a government meeting on January 12, 2026, Head of the Republic Valentin Konovalov acknowledged the problem, promising to repay last year’s debts only within the next few days.
The economic basis of the crisis is the collapse in tax revenues from coal enterprises, which form the backbone of Khakassia’s budget. Throughout 2025, income from this sector fell by more than sevenfold compared to the period before Russia’s full-scale invasion of Ukraine. The approved 2026 republican budget предусматривает a deficit exceeding 7 billion rubles (about 11% of total revenues), pointing to an inevitable continuation of financial destabilization and possible new delays in social payments this year.
Meanwhile, since late 2024, Russia’s annual economic growth has fallen from approximately 5% to near zero. Analysts cite inflation, heavy military investment, and declining oil prices amid Trump-era tariffs as key factors.
After three years of unexpected economic growth, Russia is now facing a sudden slowdown: war expenditures, inflation, and falling oil prices have begun to weigh on an economy that until recently appeared resilient to sanctions.
