moscow Cutting russian Regions’ Budgets

About 65 regions of the rf intend to cut spending on investment and infrastructure projects in 2027–2029. Revenues are not growing, and there is a shortage of funds for social benefits, the maintenance of budgetary institutions, and war-related needs. Hence, local authorities are giving up some of their planned projects and construction work.

In 2027, tatarstan plans to cut spending by 13%, to $6.6 billion; leningrad region – by 2.9%, to $3.5 billion; and yakutia – by 2.7%, to $4 billion. Investment programs, as well as the repair and modernization of public infrastructure, are subject to the cuts.

According to the rf ministry of finance’s forecast, in 2027 regional budgets will receive $331.4 billion but will spend $342 billion. The deficit will amount to $10.5 billion.

Plus, moscow is imposing new responsibilities on the regions without providing them with the necessary funds. Local authorities are forced to pay for those tasks out of their own budgets, diverting money from other programs.

At the same time, the federal government is revising the rules for financial support to poorer regions. In 2027, dagestan, tyva, ingushetia, and the altai territory are being offered a maximum of 90% of the subsidies provided for under the current budget law, instead of the full amount of payments adjusted for inflation. Even the write-off of a part of budget loan debts comes with a condition: the freed-up funds must be spent on priorities determined by moscow.

The regions are gaining less and less freedom in how they use their funds, and their budgets depend on decisions made by the federal government. The kremlin reserves the right to determine where the money should be directed, while the regions are left to pay the price in the form of unresolved local problems.