MOSCOW, May 8 (PRIME) – Russia's regional and local budgets will have their widest deficits in 20 years and tax revenue shortfalls due to a recession caused by the coronavirus and an oil price decrease in 2020–2021, S&P Global Ratings (S&P) said in a report late on Thursday.
"Russian regions' budgets are coming under great pressure from the recession provoked by lower oil prices and the social distancing measures to slow the spread of COVID-19. S&P Global Ratings is projecting steep shortfalls in revenue that will push Russian local and regional governments to their highest budget deficit in the 21st century, reaching 6–9% of their total revenue," the agency said.
The amount of deficit will depend on the scope of reduction of the tax income, possible cuts of capital expenditures and potential support of the federal government.
According to the agency, the measures of the government to support regional budgets would help with the liquidity but cannot prevent a reduction of income. As a result, a trend for debt fall will switch for the raise and the debt load of the regions can reach 30% of the current income by the end of 2022.
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