This year the regions are waiting for a record over the past two decades increasing the size of the budget deficit, followed by a rising debt burden, it follows from the analytical review of the Agency S&P Global Ratings. In the epidemic, recession and a collapse in oil prices the revenues of the territories would inevitably fall, while costs because of the mandatory the most part not significantly reduced. Moscow raw materials and regions of the hard times will survive 1 trillion accumulated budgetary surpluses, the rest will have to rely on borrowing and assistance center.Analysts S&P Global Ratings believe that Russian regional and local authorities (PM salaries), on the basis of 2020 may be faced with the highest in the last 20 years of deficit budgets. Its total amount can reach 6-9% of the total income (prior to the epidemic, and falling oil prices, this figure was projected at 2%). Causes a substantial decrease in tax revenues with a moderate decrease in capital expenditures. We will remind, at the end of 2019, it was different — regions remained in surplus, although compared with 2018, this figure fell more than 30 times, to 15.5 billion rubles against 491,5 billion rubles (see “Kommersant” on February 25). Recent estimates of the Federal budget deficit in 2020 at the Ministry of Finance, Ministry of economy and the Central Bank are now in the range of 4-6% of GDP.How strong is a drop in regional tax revenues this year, analysts do not undertake to say — as yet unclear situation with cost reductions of unknown territories and end its financial support for the center. According to the latest FTS, presented at the meeting with the President Tuesday (see “Kommersant” on 7 may), in April 2020 fees fell in both taxes forming the basis of regional budgets: the income tax from 41% in April of last year, and less volatile personal income tax by 14%.If such a fall in income reduce costs of regions (not comparable, but just any) may not be. Social spending cannot be cut for obvious reasons, reducing capital expenditure, by assumption, S&P, may be “moderate”. “Russian PM salaries will need to take difficult political decisions when prioritizing spending. The costs of the implementation of national projects on the background of already high level of social expenditures currently have to Supplement the expenses associated with limiting the spread of coronavirus infection”,— expected in the Agency.A small additional transfers that the centre intends to provide the regions, their problems, according to S&P, will not solve. We are talking about subsidies in the amount of 200 billion rubles to compensate for lost tax revenues and about 80 billion rubles of transfers to the medical equipment. These amounts will help only in part because approximately a third of the aboutnosireebob deficit budgets.Regulatory action center is quite popular and is able to ease the pressure on the creditworthiness of the regions. This, in particular, the temporary lifting of restrictions on the size of the budget deficit and the amount of debt that was provided by the restructuring agreements Federal loans. In addition, another ten years was extended the maturity of these loans, and the regions for this year are exempt from payment. Finally, term of granting short-term loans the Federal Treasury increased from 90 to 180 days — these loans help the subjects to reduce the risk of liquidity and cost of debt.And yet the inevitable increase in the deficit regions will interrupt the trend of reducing their debt burden 2017-2019 years. According to the forecast the S&P Global Ratings, the ratio of direct debt PM salaries to the size of consolidated operating revenues will increase from 20% in 2019 to 30% by the end of 2022-th. Recall that by the end of 2019 the volume of public debt of Russian regions has decreased by 4% and dropped to almost pre-crisis levels in 2014, to 2,113 trillion rubles While this indicator has not changed — according to the latest data of the Ministry of Finance on April 1, it amounted to 2,055 trillion In S&P believe that the regions, regularly issuing bonds, increase the volume of placements this year — that can close to 30% of the borrowing. Regions with small actual budget deficits are likely to attract Bank loans. Some of the territories with weak financial indicators, it can be difficult to attract market borrowings and Bank loans — as a result, they will need the support of the center. As for Moscow and raw areas, they are likely to spend previously accumulated an impressive balances in excess of $ 1 trillion— and only then begin to attract financing in the capital markets.Vadim Visloguzov
