The number of regions with budget deficits has risen sharply in Russia
The financial stability of Russian regions in 2025 has significantly deteriorated. The cumulative deficit of regional budgets reached $19.2 billion, which is 3.6 times more than a year earlier, when it amounted to $5.3 billion.
The number of federal subjects with deficits increased from 50 to 74 out of 89 regions. This was reported by the Foreign Intelligence Service of Ukraine.
The largest absolute budget gaps were recorded in Moscow, where the deficit is $3 billion, as well as in the Yamalo-Nenets Autonomous Okrug ($1.1 billion) and the Khanty-Mansi Autonomous Okrug ($0.9 billion).
In relative terms, the most difficult situation is observed in the Kemerovo, Vologda and Arkhangelsk regions, where the deficit is 34-35 per cent.
The main factor behind the increase in the deficit was a 9 per cent rise in budget expenditure to $313 billion. At the same time, income tax revenues in 55 regions fell by 9 per cent, or $6.4 billion.
The largest decline in revenues was recorded in raw material regions. In the Komi Republic, revenues fell by 50 per cent, in the Orenburg region by 40 per cent, and in the Yamalo-Nenets Autonomous Okrug by 39 per cent.
To cover the deficit, the regions used almost $13 billion of their $37.7 billion in accumulated reserves. Another 30 per cent of the deficit, or $5.8 billion, was covered by bank loans.
The federal debt of the constituent entities of the federation rose to 3.5 trillion roubles, the highest figure in the last 15 years.
Bank borrowing tripled. While in 2024 it amounted to 227 billion roubles, in 2025 it reached 676 billion roubles.
At the beginning of 2026, 37 regions had commercial loans. Of these, 17 regions took out loans for the first time to cover current operating expenses.
At the same time, Moscow is restricting regions' access to preferential financing, forcing them to turn to commercial banks at market rates. The cost of servicing regional debt has increased by 38.8 per cent and amounts to 23.9 billion roubles.
The Foreign Intelligence Service of Ukraine noted that the costs of the war against Ukraine, in particular payments to contract soldiers, have become an additional burden on regional budgets.
According to analysts, the use of reserves is a temporary solution. Once these resources are exhausted, the regions may become dependent on federal subsidies.
Analysts expect that in 2026, the financial situation in Russia's regions may deteriorate.
