Russian regions are to halve deficits this year

Significance

Last year, these transfers hit a record level, as Moscow issued extra money to help regions cope with the COVID-19 pandemic, but this was still not enough to cover all their outgoings.

Impacts

• Central government is to make RUB500bn loans available to less indebted regions to support investment in infrastructure.
• Ageing populations will necessitate higher spending on regional infrastructure in the medium-to-long term.
• Regions will weigh environmental, social and governance (ESG) bond issuance, as much of their spending is socially focused.