A new debt crisis for Russia’s regions?
Andras Toth-Czifra on how Russia’s war-driven fiscal priorities are turning regional debt relief into a tool of central control
Russia's regions are facing a new debt crisis, as total regional debt has grown to slightly below 3.5 trillion rubles, representing an 18.9 percent share of regional revenue. While this is still far from the level seen during the 2015-16 crisis, concerns have been raised by Finance Minister Anton Siluanov about the trajectory of regional debt, particularly the expansion of commercial lending to regions.
In 2025, bank loans to regions tripled to 676 billion rubles, with 17 regions borrowing for the first time. Despite a slight drop in market debt, the value of loans and regional bonds remains high, and banks are lending to regions above the key interest rate, contributing to a 41 percent increase in debt-servicing costs. Most regions are still able to manage their debt, but regions facing fiscal stress due to declining industries, such as coal, metallurgy, and timber, are particularly vulnerable.
The situation is characterized by a bifurcation, with most regions experiencing slowly shrinking fiscal space while a smaller group faces mounting debt servicing costs.
Brief written by urgent.news from Riddle Russia's own syndicated text. Machine-written — may contain errors; check the original before relying on it.
