October 20, 2025
A full-blown budget crisis is approaching Russian regions, which faced a significant drop in tax revenues in 2025 and were forced to use all their cash reserves to pay their spending obligations.
As of September 1, six Russian regions had bank account balances that covered less than 1% of their approved annual budgets—meaning they could only afford two to three days of expenses from their reserves, according to data from the Expert RA rating agency.
Arkhangelsk Oblast, with a population of approximately one million and an annual budget of 156 billion rubles, had only 50 million rubles in reserves—an amount equivalent to 0.03% of approved annual expenditures. Kalmykia had only 40 million rubles in its accounts, or 0.1% of its annual expenditures.
Volgograd Oblast, with a population of 2.4 million and a budget of 196 billion rubles, has seen its reserves fall to 100 million rubles, or 0.04% of its annual expenditures. Belgorod Oblast (with a budget of 184 billion rubles and a population of 1.5 million) has only 200 million rubles left in its accounts, or 0.1% of its annual budget.
Less than 0.5% of their annual budget—one to two days of expenses—was held in reserves by the Ulyanovsk Region (500 million rubles) and Irkutsk Region (900 million rubles). Murmansk Region’s reserves have fallen to 1 billion rubles: its reserves are enough for two days of expenses, or 0.7% of the annual budget.
Novosibirsk, Tula, and Yaroslavl Regions can afford about five days of expenses from their reserves: their reserves shrank to 5.2 billion rubles, 2.3 billion rubles, and 2.1 billion rubles, respectively.
Russian regions ended the first half of the year with a deficit of 397.8 billion rubles, which had grown to 724.8 billion rubles by the end of September. Every third region (26) recorded a decline in nominal revenue, while in real terms—adjusted for inflation—revenues decreased in 53 regions.
Sixty-seven regions closed the first half of the year with a “hole” in their local finances. The champions in terms of deficit were Kemerovo Oblast (34% of revenue), Arkhangelsk Oblast (31%), Komi (30%), Murmansk (28%), Vologda (25%) and Irkutsk Oblasts (24.6%), economist Natalya Zubarevich previously estimated .
In the Irkutsk region, a budget crisis has already led to spending cuts: in September, authorities announced plans to cut education and healthcare spending by 4.9 billion rubles. Teachers in 12 regions have faced salary cuts , and in three regions—the Yaroslavl and Ulyanovsk regions, and Dagestan—authorities are considering increasing taxes on small businesses to cover deficits. Meanwhile, in the Orenburg and Novosibirsk regions and the Krasnoyarsk Territory, bills to increase the transport tax have been submitted to regional parliaments.
The situation with regional budgets is “dire” and will only worsen by the end of the year, according to Zubarevich: “In December, there will be significant expenditures to close government contracts.” According to the Ministry of Finance, regional expenditures will exceed revenues by 370 billion rubles in December, and by 300 billion next year.
Who cares! The sheep will continue to live in shit and thank putler for the privilege.
And ask for more shit.
Good! 👍😁