Ria rating. Debt trap for governors The share of budget loans has increased again
- check the execution of the budget of a constituent entity of the Russian Federation;
- budget execution may be transferred under the control of the Ministry of Finance of the Russian Federation;
- may resort to other measures included in the budget legislation of the Russian Federation.
The debt of a constituent entity of the Russian Federation is repaid within a certain time period provided for by the terms of the loan, and cannot be more than 30 years.
The Budget Code establishes that the executive bodies of a constituent entity of the Russian Federation have all the powers to generate cash receipts to the budget of the subject and in order to pay off their debts and funds for.
The public debt is managed by the executive body of the constituent entity of the Russian Federation. This provision is provided for by the Budget Code of the Russian Federation. The Budget Code does not clearly define the concept of debt management.
Analysis of public debt of a constituent entity of the Russian Federation
If we rely on the theory that reveals the content of this concept, then the structure of the public debt of a constituent entity of the Russian Federation includes the following actions:
1) The current state and forecast for the upcoming period of public debt are assessed, taking into account the determination of indicators according to which the amount of debt repayment and servicing is determined.
2) The volume, form and conditions for borrowing funds from the state by a constituent entity of the Russian Federation are determined. Registration of loans is carried out in a certain order.
3) Establishing the volumes and conditions for providing state guarantees to a constituent entity of the Russian Federation in a certain order.
4) Establishing financial control over the receipt of government loans, repayment and servicing of public debt.
5) Preparation and implementation of actions to improve the structure of public debt, including those owned by the state, restructuring of public debt, risk management of government loans.
The Budget Code of the Russian Federation is structured taking into account that the Russian Federation is not responsible for the debt obligations of the constituent entities of the Russian Federation if a guarantee for these obligations was not given by the Russian Federation. Subjects of the Russian Federation and municipal structures are not responsible for their debt obligations if they did not issue a guarantee for them. Repayment and servicing of an internal loan taken from the state is carried out in accordance with the federal laws of the constituent entity of the Russian Federation.
Repayment of public debt includes the following provisions:
a) return of the amount of money borrowed from the city;
b) return of the amount of money borrowed on loans;
c) return of the principal debt on budget loans and budget lending received by the city from financial sources at other levels.
Repayment and servicing of public debt
Servicing the public debt is carried out at the expense of reimbursable expenses of the city’s budget funds associated with the fulfillment of debt obligations. Current expenses include:
a) payment of interest in accordance with the government loan agreement;
b) payment of tax for transactions with valuable government securities;
c) other expenses covering the organization, support of the occurrence and fulfillment of obligations to repay the debt.
Repayment and servicing of public debt is carried out in accordance with financial authorities.
The repayment of public debt is taken into account in the sources of financing deficit budget funds by reducing the amount of financial revenues to repay the deficit. The exception is for state guarantees, for which the guarantee payments lead to the emergence of equivalent claims on the part of the city in relation to the debtor who has not fulfilled the obligation given in the guarantee.
Fulfillment of obligations under state guarantees, for which payments lead to the emergence of equivalent claims on the part of the city to the debtor, are identified as part of the expenditure of budget funds as the provision of budget lending. All expenses associated with covering the debt to the state are identified in the city budget as expenses for servicing the city's debt.
The structure of the public debt of a constituent entity of the Russian Federation involves establishing an order and reflecting in the budgets the receipt of funds from loans and other debts. They are reflected in the budget as sources of covering the budget deficit.
All expenses for payments on debt obligations, including (the difference between the placement cost and the redemption cost of government securities of a constituent entity of the federation) are reflected in the budget as debt servicing expenses.
The state debt of a constituent entity of the Russian Federation involves a process of restructuring and termination of debt obligations by mutual agreement of the parties. Restructuring is carried out through partial write-off or reduction of debt.
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In modern conditions of post-crisis development of financial and economic systems and unstable economic relations, issues of public debt of the constituent entities of the Russian Federation at all levels are one of the most important and pressing tasks of the balance and security of the regional economy. In this regard, the problems of growing debt obligations of the constituent entities of the Russian Federation come to the fore.
Having barely recovered from the financial crisis of 2008-2009, which unbalanced the regional budget system and led to an accelerated increase in the debt burden, the regions faced new problems that limited the ability to ensure a positive budget balance.
According to the Ministry of Finance of the Russian Federation, the total volume of public debt of all regions of the Russian Federation continues to grow. Over the past six years, the volume of public debt of the constituent entities of the Russian Federation has consistently increased. In 2010, the state debt of the constituent entities for the first time exceeded the mark of a trillion rubles, and at the beginning of 2011, regional debt amounted to 1,095.9 billion rubles. In total, for the period from January 1, 2010 to January 1, 2016, the debt obligations of the constituent entities of the Russian Federation increased by 1,427.7 billion rubles, or 2.5 times. As of January 1, 2016, the public debt of the constituent entities of the Russian Federation amounted to 2,318.5 billion rubles. At the same time, the maximum growth – 28.2% occurred in 2013. In 2013, the volume of debt obligations increased by 386.1 billion rubles. The weakest increase occurred during 2011, where the debt obligations of the entities increased by 75.9 billion rubles. Also, during the period under review, there was an increase in the cost of servicing the public debt of the constituent entities of the Russian Federation by an average of 72.5% per year. The dynamics of public debt of the subjects is presented in Figure 1
Rice. 1 Dynamics of public debt of the constituent entities of the Russian Federation in 2010-2016.
At the same time, since 2010, there has been an increase in deficit regions. The main reason for the deterioration of the situation is attributed to the fall in tax revenues after the 2008 financial crisis. At the same time, the decrees of the President of the Russian Federation “On measures for the implementation of state social policy” constituted a significant burden on the regions. The main goals of implementing the “May Decrees” were to increase wages for employees of budgetary institutions and intensify housing construction in the regions. At the same time, the main costs of implementing these decrees fell on the budgets of the constituent entities of the Federation. After 2013, a record year in terms of the number of deficit regions and the total volume of the budget deficit, the growth rate of regional and municipal debt, in 2014 the regions faced new challenges of the macroeconomic environment - a decrease in the availability of credit resources, a deterioration in credit ratings, a reduction in economic activity, leading to a decrease in level of tax revenues. Against the backdrop of growing social obligations, partially compensated from the federal budget, and debt servicing costs, regions will have to independently develop anti-crisis budget and debt policy measures and attract additional sources of financing.
Rice. 2. Dynamics of surplus and deficit regions in the period from 2011-2015.
Since 2011, the number of surplus regions has been decreasing; if at the beginning of 2011 there were 20 of them, then by the beginning of 2015 only 11 regions did not have a budget deficit.
At the end of 2013, the total deficit of regional budgets increased 2.3 times compared to the previous year and amounted to a record 640.0 billion rubles or 7.8% of the total income of the constituent entities (versus 3.5% in 2012). In 2012, expenditures exceeded revenues in 67 regions (total deficit of 355.0 billion rubles), 16 regional budgets had a surplus (total amount of 76.0 billion rubles). Thanks to gratuitous revenues from the federal budget, last year six regions managed to execute the budget with a surplus (St. Petersburg, Moscow Region, Altai Republic, Kamchatka Territory, Karachay-Cherkessia, Chechen Republic). The total surplus amounted to less than 27 billion rubles. The total deficit of the remaining 77 regions amounted to 666 billion rubles, the main reason for which was the fall in income tax revenues
Despite the fact that during 2014 a budget surplus was recorded in almost a third of Russian regions (mainly export-oriented), by the beginning of 2015 the economic situation of the regions showed less optimistic results: the volume of the regional budget deficit reached 448 billion rubles and only 11 regions reduced budget with a surplus - export-oriented (Leningrad, Kaliningrad and Lipetsk regions, oil - Sakhalin and Tyumen (including the Khanty-Mansi Autonomous Okrug and Yamal-Nenets Autonomous Okrug) regions) and highly subsidized subjects (the republics of Ingushetia and Altai, annexed territories of the Crimean Federal District). The dynamics of surplus and deficit regions is presented in Figure 2.1.2.
An adequate assessment of the public debt of the constituent entities of the Russian Federation is possible based not only on the volume and dynamics, but also on its structure. As noted earlier, the state debt of the subjects is growing at a significant pace. In accordance with the Main Directions of the Debt Policy of the Russian Federation for 2013-2015, state policy in the field of public debt is aimed at ensuring the fulfillment of budget obligations, developing the effective issue of government securities and minimizing the cost of government borrowing. Following the increase in regional debt, the structure of regional borrowing changes. For a detailed study of the structure of public debt of the constituent entities of the Russian Federation, let us turn to Table 1.
In the context of an unfavorable economic situation and the need to fulfill social obligations, the debts of Russian regions continue to grow, but compared to previous years, the pace has decreased slightly. The total volume of public debt of all subjects of the Russian Federation increased by 10% and as of January 1, 2016 amounted to 2,318.5 billion rubles, which is by 228 billion rubles. more than a year earlier. For comparison, in 2013, public debt increased by 25%, but before that the increase was less significant, in 2011 - 7%, in 2012 - 15.6%.
Table 1 Structure of public debt of the constituent entities of the Russian Federation in 2010-2016, billion rubles.
Indicators |
as of 01/01/10 |
as of 01/01/11 |
as of 01/01/12 |
as of 01/01/13 |
as of 01/01/14 |
as of 01/01/15 |
as of 01/01/16 |
Total public debt of the constituent entities of the Russian Federation, including: |
890,80 |
1 095,99 |
1 171,80 |
1 351,46 |
1 737,4 |
2 089,51 |
2 318,59 |
a) government debt securities of constituent entities of the Russian Federation |
377,75 |
407,30 |
343,88 |
375,41 |
450,65 |
442,14 |
432,76 |
42,35 |
37,16 |
29,29 |
27,75 |
25,90 |
21,15 |
18,63 |
|
b) loans received by constituent entities of the Russian Federation from credit organizations and foreign banks |
216,85 |
232,70 |
299,98 |
438,22 |
691,54 |
888,09 |
965,43 |
in % of the volume of public debt of the subjects |
24,26 |
21,25 |
25,53 |
32,42 |
39,78 |
42,50 |
41,63 |
c) state guarantees of the constituent entities of the Russian Federation |
120,15 |
115,81 |
108,46 |
111,48 |
124,25 |
111,27 |
102,95 |
in % of the volume of public debt of the subjects |
13,48 |
10,50 |
9,22 |
8,21 |
7,13 |
5,31 |
4,40 |
d) budget loans attracted to the budget of constituent entities of the Russian Federation from other budgets of the budget system |
175,78 |
340,07 |
419,38 |
426,21 |
470,93 |
647,45 |
808,67 |
in % of the volume of public debt of the subjects |
19,66 |
31,05 |
35,78 |
31,53 |
27,05 |
30,97 |
34,85 |
e) other debt obligations of constituent entities of the Russian Federation |
0,26 |
0,18 |
0,86 |
0,85 |
0,85 |
0,55 |
0,87 |
in % of the volume of public debt of the subjects |
0,25 |
0,04 |
0,18 |
0,09 |
0,14 |
0,07 |
0,49 |
Period 2010-2016 was characterized by a significant change in the structure of public debt of the constituent entities of the Russian Federation towards an increase in the share of obligations for attracted budget loans from other budgets of the budget system of the Russian Federation and a decrease in the share of market debt. The observed increase in the volume of budget loans provided to the regions is a measure aimed at stabilizing the regions’ debt burden due to its sharp increase since 2013. As of January 1, 2010, debt obligations under budget loans amounted to 175.78 billion rubles. Over 6 years, the volume of debt obligations increased by more than 4.5 times, and at the beginning of 2016 amounted to 808.67 billion rubles. A significant increase was noticed in 2010. In 2010, the volume of budget loans increased by 2 times. If in 2010 the share of budget loans was 19.66% in the total volume of public debt of the constituent entities, then at the beginning of 2016 the share was 34.85%.
The growth in debt is caused primarily by the federal initiative to increase salaries in the public sector. It was assumed that part of the additional costs would be subsidized by the federal budget, and the regions would raise part of the funds on their own. Despite the optimization of individual items of regional budgets and the restructuring of expenses in favor of the wage fund, many regional authorities were forced to increase commercial debt. As a result, the debt burden on the regional ones became too burdensome (up to 5% or more of the regions’ total expenses). As a result, already in 2014, the Russian Ministry of Finance was forced to double the volume of budget loans allocated to the regions, but this did not relieve the regions from the need to further increase bank loans.
Budget loans are the most profitable instrument for financing regional budget deficits - their cost is 0.1% per annum, and the period of provision is up to three years. The total volume of budget loans planned for 2016 remains at the level of 2015 – 310 billion rubles. The grounds on which federal subjects will be able to take advantage of budget loans in 2016 are determined by Decree of the Government of the Russian Federation of January 27, 2016 No. 40.
Also, in the structure of public debt of the constituent entities of the Russian Federation, steady growth was observed in loans received by the constituent entities of the Russian Federation from credit institutions and foreign banks. From 2010 to 2016 the volume of public debt of subjects in this column increased by 748.58 billion rubles. and at the beginning of 2016 amounted to 965.43 billion rubles. It is noteworthy that at the beginning of 2010, the share of loans accounted for 24.26% of the total public debt of the subjects, but by the beginning of 2016 the share in this column amounted to slightly less than half of the total debt.
Particular attention is paid to state guarantees of the constituent entities of the Russian Federation. In the structure of public debt of the subjects, their share and volume is insignificant. If at the beginning of 2010 the volume of state guarantees of subjects amounted to 120.15 billion rubles, then at the beginning of 2016 the volume remained virtually unchanged and amounted to 102.95 billion rubles.
There were no significant changes in government debt securities of the entities; over 6 years the values remained virtually unchanged and at the beginning of 2016 the debt amounted to 432.76 billion rubles. It is worth noting that the share of government debt securities has a downward trend. If at the beginning of 2010 the share was 42.35% of the total public debt of the constituent entities, then at the beginning of 2016 the share decreased noticeably and amounted to 18.63%, but the volume of borrowing did not decrease significantly. This is caused primarily by an increase in debt obligations on other instruments.
In accordance with the main directions of budget policy for 2015 and the planning period 2016-2017, to maintain a balanced budget of the constituent entities of the Russian Federation and local budgets, measures are being taken to limit budget deficits and debt levels. The volume of public debt of the subjects is presented in Appendix 1.
In particular, to maintain the balance of regional budgets, conditions are provided for the subjects of the Russian Federation to receive budget loans; for these purposes, measures are taken to increase their own revenue base, reduce ineffective expenses, reduce the attraction of expensive commercial loans, and curb the increase in the volume of public debt. In accordance with the Budget Code of the Russian Federation, the maximum amount of public debt of a subject should not exceed the approved total annual volume of budget revenues of the subject without taking into account the approved volume of gratuitous receipts.
Despite the general increase in total debt, there are also positive trends. In 2016, some regions managed to reduce their debts. The volume of public debt decreased most noticeably (by more than 20%) in the Lipetsk region (-6%) and the city of Moscow (-14%). In three regions, the volume of public debt did not change. In two of them – the city of Sevastopol and the Sakhalin region – there is no public debt; in St. Petersburg, the public debt remained at the level of the beginning of 2015. But this is where the positive trends end. The difficult economic situation, as expected, continues to make adjustments to the budget programs of the regions, forcing them to look for external sources of financing for their projects and social obligations. At the end of 2015, 67 regions increased the volume of public debt. The Nenets Autonomous Okrug, which for several years had no debt at all, joined this list. In addition to it, the volume of public debt increased most noticeably in the Tyumen region (+218%), Irkutsk region (+79%) and Magadan region (+65%). At the same time, despite the significant increase in public debt in the Tyumen region and the Nenets Autonomous Okrug, the level of debt burden in these regions remains low.
The highest amount of debt was noted in Moscow (140 billion rubles) and Krasnodar Territory (145 billion rubles). But, despite the fact that the volumes of debt in these two regions are approximately equal, the indicators of the debt burden on the budget differ significantly. During 2015, Moscow reduced the volume of public debt by 14%, and the ratio of public debt to the capital’s own income is 9.1%, which is by 1.6 percentage points. lower than on January 1, 2015. According to this indicator, Moscow is among the top ten leaders among all regions of the Russian Federation. In the Krasnodar Territory, the ratio of public debt to tax and non-tax revenues is 93.6% and over the past nine months the pressure on the regional budget has increased by almost 1 percentage point, and the volume of public debt has increased by 1.9%. According to the results of the first half of the year, in another region – the Republic of Tatarstan – the level of public debt exceeded 93 billion rubles. But the Republic of Tatarstan repaid part of the debt in three months, and at the beginning of 2016 the amount of debt amounted to 90 billion rubles, which is 2.8% lower than at the beginning of the year.
For a more detailed analysis of the public debt of the constituent entities of the Russian Federation, let us turn to Table 2, where we consider the 5 strongest and weakest regions in terms of the level of debt burden, which reflects the distribution of regional debts and their dynamics.
The overall level of regional debt burden by the beginning of 2016 remained virtually unchanged compared to the indicators at the beginning of the year. The ratio of the total public debt of all regions as of January 1, 2015 to the total volume of own income over the past 12 months was 35% versus 35.4% at the beginning of 2015. At the same time, the range of changes in the indicator by region is quite wide - from 0% in the Sakhalin region and the city of Sevastopol up to 176.2% for the Republic of Mordovia. The latter is unable to stabilize the situation: despite the fact that the republic has been a record holder in terms of debt burden for quite a long time, in 2016 the volume of public debt increased by another 20.3%, and the volume of its own income for 8 months of 2015 decreased by 23.5%. Thus, the level of debt burden of the Republic of Mordovia increased by 55.1 percentage points, approaching a record value in recent years.
Table 2 Comparative characteristics of the level of debt burden of the constituent entities of the Russian Federation at the beginning of 2016
The subject of the Russian Federation |
Ratio of the subject's public debt as of 01/01/16 to tax and non-tax revenues as of 01/01/15, in % |
Ratio of the subject’s public debt as of 01/01/15 to tax and non-tax revenues at the end of 2014, in % |
The volume of public debt of a constituent entity of the Russian Federation at the beginning of 2016, million rubles. |
Change in public debt for 2015, in% |
Change in tax and non-tax revenues of the budget of a constituent entity of the Russian Federation in 2015 compared to 2014, in% |
Sevastopol |
17.6 |
||||
Sakhalin region |
64.4 |
||||
Tyumen region |
1 139,9 |
218.8 |
12.0 |
||
Republic of Crimea |
405,16 |
13.4 |
51.4 |
||
Saint Petersburg |
14 736,91 |
||||
Belgorod region |
113.4 |
106.1 |
42 330,42 |
||
Chukotka Autonomous Okrug |
117.6 |
144.5 |
14 097,10 |
51.3 |
|
Kostroma region |
123.6 |
121.1 |
17 692,12 |
||
Republic of North Ossetia–Alania |
126.1 |
114.9 |
9 063,69 |
12.3 |
|
The Republic of Mordovia |
176.2 |
121.1 |
36 042,83 |
20.3 |
23.5 |
In addition to the Republic of Mordovia, in another eleven regions the ratio of public debt to tax and non-tax revenues exceeds 100% and the top five anti-leaders for this indicator also include: the Republic of North Ossetia - Alania (126.1%), Kostroma region (123.6%), Chukotka Autonomous Okrug (117.6%) and Belgorod Region (113.4%). Moreover, the pressure on the budget is decreasing only in the Chukotka Autonomous Okrug, from 144.5% to 117.6% in 2016; in all other listed regions, the debt burden is growing. In addition, in another twenty-two regions of the Russian Federation, the level of debt burden ranges from 70% to 100%.
As before, only nine Russian regions have a low level of debt burden. Public debt is below 10% of the volume of tax and non-tax revenues in the Sakhalin region (0%), Sevastopol (0%), Tyumen region (0.8%), the Republic of Crimea (1.3%), St. Petersburg (3.5%), Nenets Autonomous Okrug (3.6%), Altai Territory (4.5%), Khanty-Mansiysk Autonomous Okrug (6.5%) and Moscow (9.1%). Despite the fact that the volume of public debt has increased significantly in both the Tyumen region and the Nenets Autonomous Okrug, this has not affected budget stability.
In total, in 22 Russian regions the ratio of public debt to own income does not exceed 35%. Moreover, according to the results of nine months of 2015, in two regions this indicator remained unchanged, and in another 17 it decreased. In total, across Russia, a decrease in the debt burden on the budget was recorded in 42 Russian regions. The leaders in terms of dynamics were the Chukotka Autonomous Okrug (-26.5 p.p. since the beginning of 2015), the Republic of Buryatia (-18.6 p.p.) and the Republic of Ingushetia (-18.1 p.p.).
Thus, the situation with regional public debts remains tense. In 2015, only certain regions recorded a decrease in public debt. In accordance with the main characteristics of regional budgets, in the coming period, most constituent entities of the Russian Federation plan to have budget deficits. Most regions have high debt burdens and high public debt arrears. Despite the stagnating economy, regions have to look for funds to implement social obligations.
(date of access: 02.12.2016)
MOSCOW, February 27 – RIA Novosti. The volume of public debt in 2017 decreased in 49 regions of Russia, in 31 regions it increased, in five it did not change, while in seven regions the volume of public debt exceeds the budget's own revenues, according to the results of a study of the level of debt burden of the regions, which was prepared by experts from the rating agency " RIA Rating of the MIA Rossiya Segodnya media group.
According to the Ministry of Finance of the Russian Federation, the total volume of public debt of all constituent entities of the Russian Federation at the end of last year decreased by 1.6% and as of January 1, 2018 amounted to 2.315 trillion rubles. As for the structure of regional public debt, budget loans still account for the majority. At the beginning of 2018, the share of budget loans was 44% compared to 42% a year earlier. Although the number of regions in the structure of which budget loans account for more than 90% of the total debt level has decreased to seven.
To compile a rating of subjects by level of debt burden, which reflects the distribution of regional debts and their dynamics in 2017, RIA Rating experts used data from the Federal Treasury and the Ministry of Finance of the Russian Federation on debt obligations and regional budget revenues. As a measure of the debt burden, the ratio of the public debt of a constituent entity of the Russian Federation as of January 1, 2018 to tax and non-tax revenues of the regional budget for 2017 was used.
Overall decline
The overall level of regional debt burden, experts say, continues to decline for the second year in a row. The ratio of the total government debt of the regions as of January 1, 2018 to the total volume of tax and non-tax revenues for 2017 was 30.5%, which is 3.3 percentage points lower than the results of the previous year. But the spread of indicators between regions is large and varies from 0% in Sevastopol and the Sakhalin region to 225.7% in Mordovia.
Experts record positive trends in 61 Russian regions, and they are associated both with an increase in tax and non-tax revenues and with a reduction in public debt. The leader in positive dynamics was the Astrakhan region, where the debt burden decreased by 38.1 percentage points due to an increase in tax and non-tax revenues by 30.9%, as well as a decrease in public debt by 5.9%. In addition, the debt burden decreased by more than 20 percentage points in the Kemerovo, Belgorod and Vologda regions. In 15 Russian regions, the debt burden decreased by 10-20%.
The level of debt burden increased in 22 constituent entities of the Russian Federation, of which in seven - by more than 10%. The most significant increase was shown by the Republic of Mordovia, increasing the debt burden by 49.7 percentage points. In the Kabardino-Balkarian Republic, the debt burden increased by 39.8 percentage points, and in the Chukotka Autonomous Okrug - by 20.4.
Outsider Seven
In general, the number of regions in which public debt exceeds tax and non-tax budget revenues has decreased from eight to seven, the study shows. In addition to Mordovia, Khakassia, the Kostroma region and Karelia, which have been included in the bottom group for several years, the volume of public debt exceeds own income also in Kabardino-Balkaria, Oryol and Pskov regions.
Mordovia continues to set anti-records, and for several years now it has been at the bottom of the ranking in terms of debt burden of Russian regions. According to the compilers of the rating, if a year earlier it was possible to note some positive changes, then at the end of 2017 they could not be found. The debt burden on the regional budget increased by almost 50 percentage points, while the volume of public debt increased by 24.3%, and tax and non-tax budget revenues decreased by 3.1%.
At the end of January 2018, it became known that due to the high debt load in Khakassia and the Kostroma region, treasury support was introduced, which should help control regional expenses. According to experts, this is in fact the first practical case of recognizing the unsatisfactory quality of regional financial management, but, in their opinion, this measure will not be able to fully help, since it is necessary to solve the problem of replenishing the regional treasury.
The compilers of the rating note that some positive changes have occurred in Khakassia over the past year. Firstly, the debt burden decreased to 136.4% (-9.1 percentage points). Secondly, there have been noticeable changes in the debt structure. Previously, experts noted a bias towards commercial loans and bonded loans, but at the end of 2017, regional authorities fully repaid commercial loans and took advantage of the opportunity for lending through the Ministry of Finance of the Russian Federation, which in the future should reduce the burden on the regional budget due to the lower cost of servicing such loans . Thirdly, tax and non-tax budget revenues increased by 14.7%, which is higher than the increase in the volume of the republican public debt (+7.6%).
The Kostroma region also recorded some positive changes: the debt burden decreased to 135% (-8.3 percentage points) due to the rapid growth of tax and non-tax budget revenues (9.4%) relative to the growth in the volume of regional public debt (+3.1 %).
In general, in 47 regions of the Russian Federation, public debt as of January 1, 2018 exceeds 50% of the volume of tax and non-tax budget revenues, of which in 32 constituent entities of the Russian Federation, public debt exceeds 70% of their own revenues. Compared to the previous year, the number of regions in this group decreased - as of January 1, 2017, in 54 regions of the Russian Federation, public debt exceeded 50% of tax and non-tax revenues, of which the ratio of public debt to tax and non-tax revenues was more than 70% in 36 regions.
Change of leaders
As before, in nine Russian regions, experts recorded a low level of debt burden, but their composition has changed slightly compared to last year. In the Sakhalin region and Sevastopol there is still no public debt. The leading group, where public debt is less than 10% of tax and non-tax budget revenues, also includes the Tyumen region, Moscow, Leningrad region, Altai and Primorsky territories, St. Petersburg, as well as the Republic of Crimea, which took the place of the Khanty-Mansi Autonomous district - Ugra.
All regions in the group, with the exception of St. Petersburg, managed to reduce their debt burden.
Time to repay debts
The coming year will be the year of restructuring of budget loans issued to the regions in 2015-2017. Depending on the dynamics of consolidated budget revenues for each region, their repayment period will change, increasing by 7-12 years. This measure will allow the regions to free up resources to cover their budget expenditures without increasing public debt and reduce the level of budget deficits, which should have a positive effect on the dynamics of the debt burden. On the other hand, in 2018 the regions will not have the opportunity to receive loans from the federal budget, which means that in some cases it is possible that the share of commercial loans or bond borrowings will increase.
Based on the results of 2018, RIA Rating experts do not expect a significant change in the volume of public debt compared to the result of last year. At the same time, the growth in the volume of tax and non-tax revenues of regional budgets will not exceed 10%. In this case, the debt burden will be 28-30% and will change slightly compared to the results of 2017.
The results of the study can be found in detail on the website riarating.ru.
In addition to sovereign debt, the general debt system of the Russian Federation includes subfederal and municipal debt. It is a consequence of the accumulated budget deficit of regions and local budgets. More than 20 subjects of the Federation have a deficit exceeding 5% of income, including such large ones as the Krasnodar and Krasnoyarsk territories.
The total share of regional and municipal debt is consistently at the level of 20% of the country's total debt. The amount of debt is presented in table. 7.9.
Table 7.9. Subfederal and municipal debt
The largest share (85%) of the territories' debt is occupied by the debt of the subjects of the Federation. Over the past 5 years, the volume of public debt of the constituent entities of the Russian Federation has consistently increased by an average of 25% annually (Fig. 7.13). As of November 1, 2013, the debt of the constituent entities of the Federation amounted to 1.47 trillion rubles, or 2.2% of GDP.
Rice. 7.13.
In accordance with the Budget Code of the Russian Federation, the maximum amount of public debt of a subject of the Federation and municipal debt should not exceed the total annual budget revenues of the subject of the Federation and the municipality, excluding gratuitous revenues. For constituent entities of the Russian Federation, in whose budgets the share of interbudgetary transfers from the federal budget (with the exception of subventions, as well as subsidies from the Investment Fund of the Russian Federation) during two of the last three reporting financial years exceeded 60% of the volume of own revenues of the consolidated budget of the subject, the maximum amount of public debt is limited 50% of the above income.
The maximum amount of expenses for servicing the public debt of a constituent entity of the Russian Federation or municipal debt in a financial year should not exceed 15% of the volume of expenses of the corresponding budget (excluding expenses from subventions from other budgets).
As of September 1, 2012, the share of budget loans in the structure of regional debt exceeded 37%, the share of securities amounted to almost 30%, the share of bank and other loans accounted for about 24%, and the share of state guarantees of entities - almost 10% (Fig. 7.14).
Rice. 7.14.
The market debt of territories in the form of issues of securities of regions and municipalities at the end of 2012 amounted to 345 billion rubles. (Table 7. 10). This is 7.5% of the total volume of the government securities market. The portfolio of regional bonds traded on the Moscow Exchange consisted of 92 issues from 36 issuers. The largest borrower is Moscow (44% of all issues).
Table 7.10. Domestic market for subfederal and municipal bonds, billion rubles.
A peculiarity of the structure of regional debt is that in recent years the share of market debt has been falling, while the share of loans from other budgets has been growing.
The growth of budget loans is explained by a conscious national policy; In the coming years, budget lending to the regions will decrease, which will give the regions greater freedom to issue securities.
Regions have the right to borrow from abroad. Under the terms of the Budget Code, six entities can now borrow from abroad: Moscow, St. Petersburg, Tyumen Region, Khanty-Mansiysk Autonomous Okrug - Yugra, Yamalo-Nenets Autonomous Okrug and the Republic of Bashkortostan. But in fact, only the city of Moscow and the Republic of Bashkortostan have debts in foreign currency to foreign banks. In order to enter foreign markets only financially stable regions, it is planned to introduce the following norm. For external loans, it is necessary to have credit ratings from at least two leading international rating agencies at a level not lower than the level of sovereign ratings of Russia. Only four of the six entities that are allowed to borrow abroad have the required credit ratings.
At the same time, many bonds of the constituent entities of the Federation and municipalities are of high quality: 35 issues are included in the Lombard List of the Bank of Russia. This is a list of high-quality reliable assets against which the Bank of Russia issues loans to commercial banks.
Accumulated debts require regions to pursue a balanced debt policy. Regulation and monitoring of the state of public debt of the constituent entities of the Russian Federation and municipal debt are of great importance. It is planned to strictly adhere to budgetary restrictions on the maximum amount of debt, deficit, and debt servicing costs. To ease financial stress in the regions, it is open regional debt restructuring program for budget loans, including consolidation of loans, write-off of fines and penalties and repayment of loans in equal installments until 2016.
In order to strengthen the financial sustainability of regional budgets, it is possible to create reserve funds of the constituent entities of the Russian Federation similar to sovereign funds. This is especially important for those entities whose income is subject to changes in the macroeconomic environment and where large taxpayers are registered. The region will be able to cover from its reserve fund a deficit of more than 10% of the revenue portion - without taking into account federal transfers and funds from privatization and regional property.
RIA Rating - March 2. According to the Ministry of Finance of the Russian Federation, the total volume of public debt of all constituent entities of the Russian Federation at the end of 2016 increased by 1.5% and as of January 1, 2017 amounted to 2.353 trillion rubles. This is the smallest increase in government debt over the past few years. For comparison, in 2015 the state debt of the regions of the Russian Federation increased by 11%, in 2014 - by 20%, in 2013 - by 28.6%. The decrease in the growth rate of regional borrowing can be explained by the more conservative approach of regional authorities to increasing the debt burden on the budgets of the constituent entities of the Russian Federation, which is justified in the context of the continued unstable economic situation. In addition, according to experts from the Rating Agency "RIA Rating" of the media group MIA "Russia Today", a reduction of Moscow's public debt by 78.6 billion rubles, mainly due to the repayment of external debt, had a certain impact on the overall result. Just a year ago, Moscow was one of the leaders in terms of the absolute value of public debt among all Russian regions. At the beginning of 2017, the capital's public debt amounted to 61.9 billion rubles.
The volume of municipal public debt at the end of 2016 increased by 6.7% and amounted to 364.3 billion rubles. The total volume of public debt of all constituent entities of the Russian Federation and the debt of municipalities that are part of the constituent entities of the Russian Federation as of January 1, 2017 amounted to 2.72 trillion rubles, which is 2.2% more than a year earlier.
A moderate increase in public debt took place against the backdrop of growing budget revenues of the constituent entities of the Russian Federation. At the end of 2016, the total volume of tax and non-tax revenues of all constituent entities of the Russian Federation increased by 9.6%, while a decrease was recorded only in seven regions. Against this background, the volume of total expenditures of the budgets of all constituent entities of the Russian Federation increased by 5.6%.
More and more budget loans
In the structure of regional public debt, an increasing share falls on budget loans. In 2016, Russian regions actively replaced commercial debt with cheap budget loans. Due to this, the share of budget loans in the total public debt as of January 1, 2017 amounted to 42.1%, and the share of commercial loans accounted for 34.9%. At the end of 2015, the ratio was diametrically opposite. The activation of the debt market led to an increase in regional borrowing, which could not but affect the increase in the share of government securities in the debt structure from 18.7% at the end of 2015 to 19.4% at the end of 2016. The share of government guarantees decreased from 4.4% to 3.8% in 2016. Information on the structure of regional public debt is given in the table >>
In 14 regions there is no debt to commercial banks. With the exception of Moscow, the Tyumen region and Khanty-Mansi Autonomous Okrug-Yugra, the main components of public debt in these regions are budget loans. Regions such as Moscow, Primorsky Krai and Kamchatka Krai have completely repaid their commercial debts over the past year. At the same time, in a number of regions there is a significant bias in the debt structure towards commercial loans, which may cause concern, especially if the region’s position in the debt burden rating is close to the bottom ten.
To determine the level of debt burden, experts from the Rating Agency "RIA Rating" of the MIA Rossiya Segodnya media group compiled a rating of constituent entities of the Russian Federation by the level of debt burden, which reflects the distribution of regional debts and their dynamics in 2016. The rating used data from the Federal Treasury and the Ministry of Finance of the Russian Federation on debt obligations and revenues of regional budgets. As a measure of debt burden, the rating used the ratio of the public debt of a constituent entity of the Russian Federation as of January 1, 2017 to tax and non-tax revenues of the regional budget (own income) for 2016.
The debt burden on the budgets of Russian regions has decreased
The overall level of regional debt burden has decreased over the past year. The ratio of the total public debt of all regions as of January 1, 2017 to the total volume of tax and non-tax revenues for 2016 was 33.8%, which is 2.7 percentage points lower than a year earlier. But at the same time, the range of values in the regional context remains quite wide. The level of debt burden varied from 0% in the Sakhalin region and Sevastopol to 176% in the Republic of Mordovia. Compared to the results of last year, the leading and trailing regions in the ranking have not changed.
The Republic of Mordovia has been at the bottom of the ranking in terms of debt burden of Russian regions for several years now, but it is worth noting that positive changes are being observed here too. At the end of 2016, the level of debt burden decreased by 6.5 percentage points, which was due to a 15.7% increase in tax and non-tax revenues in the region. The public debt of the Republic of Mordovia itself increased by 11.6% due to budget loans and a bond issue worth 5 billion rubles, placed in September 2016.
The number of regions whose public debt exceeds their own income has decreased
In addition to the Republic of Mordovia, in seven more Russian regions the amount of public debt exceeds their own budget revenues, but, in comparison with 2015, their number has almost halved. As of January 1, 2016, there were 14 such regions. In addition, there are positive trends in this part of the rating: in five out of eight regions, the debt burden decreased over the past year, and in all cases this was due to the faster growth of tax and non-tax revenues compared to increase in government debt.
Judging by the debt structure, not everyone in the bottom group of regions took advantage of the opportunity to replace more expensive commercial loans with lending from the Ministry of Finance of the Russian Federation. If budget loans occupy more than half of the debt structure of the Smolensk region and the Republic of Karelia, and their share in 2016 increased to 58.8% and 51.7%, respectively, then in a number of regions there are structural distortions towards commercial loans. Thus, in the Astrakhan region the share of commercial loans is 50.5%, in the Kostroma region - 52.6%, in the Jewish Autonomous Region - 61%, in the Republic of Mari El - 67.7%. In addition, in the Republic of Khakassia, almost half of the government debt (49.8%) is accounted for by bond issues and another 37.3% by commercial loans. The debt burden in Khakassia in 2016 increased by 28.7 percentage points and amounted to 145.5%. If the debt policy in the republic does not undergo any fundamental changes, then in the near future the Republic of Khakassia may displace the Republic of Mordovia from the position of the bottom region in the rating.
As of January 1, 2017, in 54 regions of the Russian Federation, public debt exceeded 50% of the volume of tax and non-tax budget revenues, of which in 36 constituent entities of the Russian Federation, public debt exceeded 70% of their own revenues. Compared to the previous year, the number of regions in this group decreased slightly - as of January 1, 2016, in 57 regions of the Russian Federation, public debt exceeded 50% of tax and non-tax budget revenues, of which the ratio of public debt to tax and non-tax revenues was more than 70% in 44 regions.
New regions emerged in the group of leaders
A low level of debt burden is still observed in nine Russian regions, but their composition has changed slightly compared to last year. Less than 10% of the volume of tax and non-tax budget revenues is public debt in the Tyumen region, St. Petersburg, Moscow, Altai Territory and Khanty-Mansiysk Autonomous Okrug-Ugra. The places that left the leading group of the Nenets Autonomous Okrug and the Republic of Crimea were taken by the Leningrad Region and Primorsky Territory. There is no public debt in the Sakhalin region and Sevastopol. Five regions in the group managed to reduce their debt burden. In the Khanty-Mansiysk Autonomous Okrug - Ugra and the Tyumen Region, the debt burden has increased.
In most regions of the Russian Federation, the debt burden has decreased
In 2016, the level of debt burden decreased in 63 constituent entities of the Russian Federation. Positive trends are mainly associated with an increase in tax and non-tax revenues, but in some regions there is also a reduction in public debt. The leader in positive dynamics was the Republic of Ingushetia, whose debt burden decreased by 36.8 percentage points due to both a decrease in public debt by 26% and an increase in its own income by 9.4%. In addition, the debt burden decreased by more than 20 percentage points in the Republic of North Ossetia-Alania, the Vologda Region, the Chukotka Autonomous Okrug and the Altai Republic. In thirteen Russian regions, the debt burden decreased by 10-20%.
In 20 constituent entities of the Russian Federation, the level of debt burden has increased, of which in six - by more than 10%. The Republic of Khakassia once again showed the most significant increase, increasing the debt burden by 28.7 percentage points. In addition, in the Nenets Autonomous Okrug the debt burden increased by 25.2 percentage points and in the Astrakhan region - by 24.1 percentage points.
The volume of public debt increased in 49 regions of the Russian Federation
According to experts from the Rating Agency RIA Rating, in 2016 the absolute volume of public debt increased in 49 regions, remained unchanged in the Vladimir region, and decreased in 33 regions. In Sevastopol and the Sakhalin region there is still no public debt.
The leader in positive dynamics was Moscow, whose public debt, including due to the full repayment of commercial loans, decreased by 56%. In addition, the volume of public debt in the Leningrad Region and Kamchatka Territory decreased by more than 30%. The Republic of Crimea, where until recently there was almost no public debt, increased the volume of public debt 13 times in 2016. In the Nenets Autonomous Okrug, the volume of public debt increased 3 times, and in the Tyumen region - by 83%. But the ratio of public debt to the volume of tax and non-tax revenues in these regions is far from risky levels.
The Krasnodar Territory is still the leader in the absolute value of public debt and over the past 2016 its volume increased by 3.3%, reaching 150 billion rubles. But due to an increase in tax and non-tax revenues by 15.4%, the level of the region’s debt burden decreased by 10.3 percentage points, and at the end of 2016 it amounted to 88.2%. In three more regions - the Republic of Tatarstan, the Krasnoyarsk Territory and the Moscow Region - the volume of public debt exceeds 90 billion rubles, but the situation with the debt burden on regional budgets remains at an acceptable level.
In 2017, the growth rate of public debt will be low
Recently, the Ministry of Finance of the Russian Federation has increasingly heard calls for regions to more actively use bond loans, the servicing of which will cost the regions less than loans from commercial banks, and it is also said that budget loans are rather a temporary, anti-crisis measure that cannot exist permanently. basis. As confirmation of this, in the Federal Budget for 2017, only 200 billion rubles were reserved for budget lending compared to 338 billion rubles issued in 2016, and a further reduction can be expected. In addition, budget loans were issued for a period of 3 years, and this year the deadline for repayment of those loans that were received by the regions in 2014 in the amount of 230 billion rubles comes. Even taking into account the fact that the volume of subsidies intended in 2017 to equalize regional budgets has been increased by 100 billion rubles, the Ministry of Finance will not have enough money for everyone. At best, the current debt to the Ministry of Finance of the Russian Federation is refinanced using the budget reserve. Probably, due to the stabilization of financial markets, we can expect a surge in regional activity in the debt market and an increase in the share of government securities in the regional debt structure. Speaking about the absolute volume of debt, we can assume that in the context of expected weak economic growth, the conservative policy of regional authorities regarding borrowing will continue, and the overall situation with regional debts will continue to improve.
Experts from the Rating Agency "RIA Rating" expect an increase in the volume of public debt by 5-7% at the end of 2017, and tax and non-tax revenues of regional budgets within 10%. In this case, the debt burden will be 32-33%, and will not change significantly compared to the 2016 result.
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