Russia : Subnational Governments' Fiscal Response to the Economic Downturn
The aim of this note is to present and analyze subnational fiscal trends in Russia in the context of overall slowing economic growth and falling oil prices over the last few years. In particular, in 2015, GDP fell by 3.7 percent. Despite efforts to...
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| Format: | Report |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Subjects: | |
| Online Access: | http://hdl.handle.net/10986/26101 |
| Summary: | The aim of this note is to present and
analyze subnational fiscal trends in Russia in the context
of overall slowing economic growth and falling oil prices
over the last few years. In particular, in 2015, GDP fell by
3.7 percent. Despite efforts to cut expenditures, the
federal deficit increased to 2.4 percent of GDP. Subnational
governments were also affected by the economic slowdown.
Aggregate subnational revenues declined, in real terms, by 6
percent between 2014 and 2015. Revenues from taxes
(including shares of federal taxes) fell by 4 percent while
federal transfers fell by 13 percent. Nevertheless, the
aggregate fiscal performance of subnational governments
actually improved over this period. The nadir of subnational
government finances occurred in 2013, when the consolidated
subnational deficit reached 0.9 percent of GDP. Since then,
it has shrunk. In 2015, the deficit was equal to only 0.2
percent of GDP. This was largely achieved by drastic cuts in
spending. Spending in the social and infrastructure sectors
both fell by 9 percent in real terms between 2014 and 2015.
This note examines the fiscal prospects of subnational
governments in Russia, focusing particularly on the nature
of these spending cuts and whether they are sustainable over
the medium term. |
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