The peak of the economic crisis in Russia has been overcome: in July 2022 the Russian economy saw growth after the negative trend of the past four months was reversed, says the Expert magazine citing the outputs of research carried out by Alexander Deryugin, Researcher of the Budget Policy Department of the Gaidar Institute.

Based on the results of seven months of 2022, growth in revenues of consolidated budgets of the subjects of the Russian Federation outpaced growth in budget expenditures and inflation, thus suggesting that regions retained a sufficient financial stability. In the cost structure, expenditures on the national economy replace more and more those on federal issues, education and culture. The federal government’s urgent measures to replace the regional commercial debt with public budget loans facilitated a reduction both in debt-servicing expenditures and risks associated with a failure to meet regional debt obligations.

75 subjects of the Russian Federation ended seven months of this year with consolidated budget surplus (based on the results of seven months of 2021 which was quite successful for regions in financial terms – 71 subjects), while its overall volume was equal to Rb1.48 trillion or 13.4% of the overall volume of consolidated budgets of the subjects of the Russian Federation without subventions taken into account.

Despite substantial growth, the size of regions’ public debt does not present a serious problem owing both to the lagging of growth rates of the public debt from those of regional budgets’ own revenues and a low cost of debt servicing. It is not the size of the public debt which may be a problem, but the level of a debt burden, uniformity of debt repayment and a relative cost of servicing, Alexander Deryugin warns.