Expert points to risk of budget deficits in Russian Arctic regions

russian news agencyRUSearchSectionsCloseEconomySportsCulture CloseRussian Politics & DiplomacyRussian Politics & DiplomacyInto section →FOREIGN POLICYDOMESTIC POLICYWorldWorldInto section →Business & EconomyBusiness & EconomyInto section →Oil & gas industryInternet & TelecomTrade & CooperationTransportMilitary & DefenseMilitary & DefenseInto section →Science & SpaceScience & SpaceInto section →Emergencies Emergencies Into section →Society & CultureSociety & CultureInto section →Press ReviewPress ReviewInto section →SportsSportsInto section →Special projectsTASSAgencyTASS todayHistoryManagementContactsProjects & ServicesTASS-PHOTONEWS TERMINALPersonal data processing policy TASSPress ReleasesPrivacy Policy​ tass.comTerms of useANTI-CorruptionSubscribeSocial MediaTelegramSubscriptionsRSSAdvertisingContacts{{dayPoint.date | date : 'd MMMM yyyy'}}{{newsPoint.date * 1000 | date : 'HH:mm'}} {{newsPoint.mark}}{{newsPoint.title}}{{newsPoint.title+ ' '}}{{newsPoint.subtitle}}All newsARCTIC TODAYExpert points to risk of budget deficits in Russian Arctic regions According to Svetlana Lipina, without comprehensive measures to strengthen the revenue base and optimize costs the risk will remain significant in 2026 - 2027MOSCOW, May 8. /TASS/. The risk of growing budget deficits in 2026-2027 in the Russian Federation's Arctic Zone regions remains significant without comprehensive measures to strengthen the revenue base and optimize costs, Deputy Chairperson of the Council for the Study of Productive Forces at the Academy of Foreign Trade under Russia's Ministry of Economic Development, Professor at the Mining Institute of the MISIS University of Science and Technology Svetlana Lipina told TASS. "The sanctions are a significant, though not the only reason for the deficit. Without comprehensive measures to strengthen the revenue base, optimize costs and without targeted support for vulnerable regions, the risk of growing deficits in 2026-2027 remains significant," she said. The sanctions pressure adds to the burden on regional budgets through lower revenues from extractive industries, higher logistics costs and limited access to financing, which constrains investment projects, she continued. At the same time, she said, internal factors are playing a key role, including cyclical energy prices, the structure of tax revenues and the regions' dependence on federal transfers. Raw-material regions remain most vulnerable, as there a decrease in oil and gas revenues affects directly the budget balance, while in a number of other regions the deficit is associated with a high spending burden. "The Yamalo-Nenets Autonomous Region and the Khanty-Mansi Autonomous Region are heavily "raw-material regions": less oil and gas revenues are immediately reflected in the deficit. At the same time, for example, in Moscow, the deficit more often is associated with large-scale spending programs," the expert said. Under the current conditions, deficits may remain at the elevated level, but a systemic crisis may be avoided through federal support measures and budget re-distribution, she added. "A chance of increasing deficit remains for 2026 in case of another sharp backtrack in energy prices, if the sanctions persist or intensify and would not be compensated by federal transfers or growing prices and export. <...> The deficit is expected to remain at a high level, but a systemic crisis will be avoided thanks to re-distributions from the federal budget and due to temporary measures," she explained. The biggest vulnerability is typical for regions with high dependence on raw material incomes and a limited tax base, the professor said. Those regions are the Yamalo-Nenets and the Nenets Autonomous Regions, the Murmansk and the Arkhangelsk Regions, the Komi, the Krasnoyarsk (including Taimyr), the Yakutia Regions and the Chukotka Autonomous Region. The situation in the Khanty-Mansi Autonomous Region with a high concentration of taxpayers also has a significant impact. The scientist outlined three scenarios for the development of this situation. In the basic scenario, the deficit will remain high though manageable in an unstable external environment. The pessimistic scenario forecasts an increase in the deficit against lower prices and investments, while the optimistic one assumes it will be declining along with improving external conditions and with support measures. "The risk of a "new norm" shortage is especially high for the Nenets Autonomous Region, the Chukotka and small northern municipalities due to the high cost of infrastructure maintenance, seasonal economy and dependence on a few payers. <...> To prevent the deficit from becoming the "new norm," there should be a combination of federal support and structural measures, especially those aimed at the Arctic and subarctic regions," she explained.