Three-Quarters of russia’s Regions Have Become Poorer Since the Beginning of the Full-Scale War Against Ukraine

In 65 of russia’s 85 regions, real budget revenues at the end of 2025 were lower than they were before the start of the full-scale war – in 2021. At the same time, in 52 regions, expenditures – adjusted for inflation – exceeded the level of four years ago. This was one of the factors contributing to the rapid growth of budget deficits.

The main reasons for the decline in revenues were cuts in federal transfers and a decrease in corporate income tax revenues. Non-repayable revenues decreased by approximately 1.1 trillion rubles in real terms, while tax revenues from corporate profits fell by an additional 820 billion rubles. The reduction in transfers is attributed to the completion of some targeted programs and the reallocation of funds at the federal level. The drop in corporate income tax was a result of deteriorating financial performance among large enterprises, particularly in the coal and metallurgical sectors.

Budget revenues fell the most in kemerovo region – by nearly 39%, vologda region – by 34.5%, and in ingushetia – by 30.8%.

Overall, in 85 regions, corporate income tax revenues fell by 16.6% in real terms. Declines were recorded in 51 federal subjects. The worst situation was in the kuzbass, where these revenues plummeted by nearly 79%. They fell by more than 60% in belgorod, kursk, lipetsk, vologda, murmansk, and orenburg regions, as well as in karelia and khakassia.

Despite revenue problems, most regions were unable to significantly cut spending. In 52 regions, real expenditures remained higher than in 2021. Spending was reduced in only 33 regions. The largest budget cuts were made in ingushetia – by 30%, kaliningrad region – by 15.4%, chechnya – by 14.6%, and karelia – by 14.5%.

Social spending was hit hardest. In 76 of 85 regions, real spending on healthcare was cut. Funding for housing and utilities was significantly reduced: in yakutia – by approximately 77%, and in the kuzbass – by 70%. Education was also affected by the cuts. In real terms, less money was allocated, in particular, to kursk, arkhangelsk, astrakhan, and kemerovo regions, as well as to komi, dagestan, chechnya, khakassia, buryatia, and ingushetia.