(MOSCOW) – Russia’s regional governments recorded a combined budget deficit of 1.48 trillion rubles in 2025, equivalent to approximately 19.2 billion US dollars at current exchange rates, according to the Kommersant business daily. The shortfall marks a record high as expenditure continued to exceed revenue growth.
The number of regions running deficits rose sharply from 50 in 2024 to 74 by the end of 2025. Russia has 83 federal subjects, meaning the large majority are now facing fiscal strain.
Several regions report serious funding shortages. Combined regional deficits total roughly 20 billion US dollars, or about 1.48 trillion rubles. The trend indicates a broad deterioration in local public finances over the past year.
Among the regions most affected are key energy producing territories. Yamalo Nenets Autonomous Okrug, Russia’s largest gas producing region, has moved into deficit and now reports a shortfall of about 1 billion US dollars. Khanty Mansi Autonomous Okrug, heavily dependent on oil production, also reports a deficit of roughly 1 billion US dollars.
Analysts attribute the decline in regional revenues to falling export earnings from oil and gas, the impact of international sanctions and higher war related spending. Energy exports remain central to Russia’s fiscal structure. A reported drop of about 50 percent in oil and gas revenues has had direct consequences for both federal and regional budgets.
Moscow city has also reported a deficit of approximately 3 billion US dollars. The capital traditionally receives priority federal support, but current fiscal pressures appear to have limited additional transfers.
Tourism revenue has declined in some regions. In Sochi, visitor numbers reportedly fell by around 30 percent, affecting local income streams. Other regions close to areas of military activity have faced infrastructure damage and disruption to economic activity.
Economists cited by Russian media warn that the financial, banking and industrial sectors are under sustained pressure. Higher taxation and increased state borrowing have been used to cover shortfalls. Some business figures have publicly criticised current economic policy, reflecting growing concern within parts of the private sector.
The deterioration in regional finances follows nearly four years of large scale war spending after the full scale invasion of Ukraine in 2022. Initial military expenditure boosted certain industries and incomes. However, as federal reserves have narrowed and export revenues have weakened, fiscal stress has become more visible across the federation.
The widening regional deficits suggest mounting economic challenges for local authorities as the conflict continues.
Russia’s regions went on a splurge last year, running a record combined budget deficit of around 1.48 trillion rubles ($19.22 billion) as spending continued to outpace revenue growth, the Kommersant business newspaper reported Thursday. The number of regions running a deficit also increased significantly — from 50 in 2024 to 74 in 2025.
