Page 58 - RPTRusFeb17

6.2.1 Local debt market dynamic
6.2.2 Regional debt dynamic
The state’s gross domestic borrowing will rise to 1.7% of GDP in 2019 from 1.2% in 2016. T he size of OFZ bond placement will be the maximum of the current market capacity in 2017–2019. “In case of total fulfillment of state domestic borrowing programs, the market volume of state securities will rise by RUB3.3 trillion to RUB9.4 trillion by 2019, or from 7.4% to 9.5% of GDP. The increase will amount to 53% over the three-year period, exceeding the corresponding figure in the 2013–2016 period (39%) by almost a half,” the ministry said.
Tax and non-tax revenues of the regions increased by 20% in January-February compared with the same period in 2016, Finance Minister Anton Siluanov said at a meeting between Prime Minister Dmitry Medvedev and the governors, Vedomosti reported on February 28 . "The first period of this year showed that the regional budget revenues have continued to grow quite rapidly. The total amount of tax and non-tax revenues in the period from January to February 20 rose by more than 20% compared with the corresponding period last year," the minister said. According to Medvedev, the 2016 deficit of regional budgets decreased from RUB170bn (€2.75bn) to RUB12.5bn. But the debt burden remains significant. "The situation remains difficult. There are a number of positive changes, but there must be more ... The number of regions where the debt is larger than the regional income has been reduced, but the overall debt burden remains very important and very big," the prime minister said. While Russia's fiscal situation at the federal level is improving, rising debt in some of the regions, which rely on income taxes as their main source of funds, has been getting steadily worse. Some regions now have debt servicing obligations that exceed their income. In late February, the Kremlin set up a new agency tasked with monitoring the regions closely, while the government promised more funds to cover the spending promises in the so-called "May decrees" that set high targets for pay increases and social payments.
58 RUSSIA Country Report February 2017 www.intellinews.com