The Russian Ministry of Finance forecasts a sharp increase in regional budget deficits to $21 billion
The Russian Ministry of Finance warns of a further deterioration in the financial situation in the regions. According to the ministry’s estimates, the cumulative deficit of regional budgets in 2025 could reach approximately $21.1 billion.
Finance Minister Anton Siluanov acknowledged that the situation remains difficult, noting a sharp increase in the “budget gap” in recent years.
According to Siluanov, last year alone the regional deficit rose to $16.7 billion, up from the usual 200–300 billion rubles. By 2025, it could increase by another $4.4 billion.
The Ministry of Finance is calling on the regions to pursue “budgetary consolidation” and reduce the deficit to around $11.1 billion.
The main reason cited for the growing deficit is the drop in tax revenues, primarily income tax. Over the course of the year, the regions fell short by about $5.3 billion.
The sharpest drop in revenues was recorded in regions that were previously financial donors. These include Komi, the Orenburg Region, the Yamalo-Nenets Autonomous Okrug, the Tyumen Region, Karelia, and others.
According to official data, industrial production is declining in many regions, construction activity is falling, investments are shrinking, and consumer demand is slowing.
Analysts attribute this to the general economic slowdown and declining export revenues, which are putting additional pressure on regional budgets.
Despite a temporary increase in oil export revenues, Russia’s economy continues to accumulate serious imbalances due to the war and high military spending. The budget deficit is growing rapidly, inflation is accelerating, and reserves are gradually being depleted. Analysts point out that oil revenues are only temporarily masking deeper problems.
Russian authorities are planning massive layoffs of public sector employees amid a sharp rise in the government budget deficit. As of April 1, the number of employees recommended for dismissal reached 105,147. These figures are provided by Rostrud.
