The Kremlin has written off a further half a billion dollars of debt owed by the regions to avoid default – intelligence sources
This has been reported by the Foreign Intelligence Service.
As noted by the agency, the Republic of Sakha (Yakutia), Tatarstan, Khabarovsk Krai, as well as Vladimir, Kurgan and Omsk regions are affected by the debt write-off.
According to the SVR, the Russian Ministry of Finance forecasts that the cumulative deficit of regional budgets in 2026 could reach 1.9 trillion roubles ($26.6 billion). At the same time, more than 20 Russian regions already officially have the status of being financially troubled.
Among the main reasons for the deterioration of the situation are cited a decline in tax revenues, an increase in social spending and a growing burden due to military expenditure, part of which the federal authorities are shifting onto the regions.
The report noted that the practice of debt write-offs for Russian federal subjects has become systematic. In 2025, 58 regions made use of this mechanism, which allowed them to reduce their debt portfolio by approximately $3.2 billion.
In 2026, according to the SVR, 54 regions had already been released from debt obligations amounting to around $2.4 billion.
“In effect, the Kremlin is forced to grant a mass financial amnesty to its own regions every year to prevent them from declaring default on live television,” the Foreign Intelligence Service noted.
The agency believes that the current situation demonstrates the regions’ growing dependence on the federal centre, which is intensifying against the backdrop of the war.
"The regions’ own revenue base is not growing, expenditure is not being cut, and the war economy is draining resources faster than they can be replenished. Debt write-offs provide the regions with short-term relief, but do not address any of the causes of the crisis," the SIS emphasised.
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