Regions' debts cause concern
The Russian federal subjects in 2009 increased their debts with 55 percent. That could eventually make their way out of the crisis harder.
The regions in 2009 boosted their debts with 55 percent, and another 33 percent debt increase is expected in 2010. That will bring the regions’ total debts to about 1.2 trillion RUB, newspaper Vedomosti writes in an editorial. In a third of the subjects, the debts now exceed 30 percent of the regions’ own budget revenues.
The situation is now considered to be of major concern for many of the regions’ economies.
Meanwhile, the federal government is introducing significant cuts in transfers. While federal transfers to the regions in 2009 were increased with 34 percent in a bid to ease the consequences of the crisis, the transfers are this year likely to be cut with 20 percent. At the same time, the regions’ possibilities for refinancing are strongly limited, Vedomosti writes.
As noted by Prime Minister Vladimir Putin in his speech to the State Duma this week, the government in 2009 boosted spending with 27,3 percent compared with 2008-figures, at the same time as revenues plummeted 20,9 percent. As much as 50 percent of the budget spending was channeled to social-oriented measures, much of it in the regions.
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