Regions’ Budgets in January-May 2020 : Fiscal Transfers Stabilize the Situation

In May 2020, regions' own tax and non-tax consolidated budget revenues decreased by 19.8% as compared with May 2019; this is a continuation to a large extent of the April trends when regions' budget revenues were hit hard by the crisis and restrictive measures. At the same time, financial injections on the part of the federal center justified both by an increase in the planned volumes of the financial aid to regions and more rhythmical provision thereof permitted to reduce the risk of reduction of current budget revenues of less well-off regions.Early this year, the upward trend of differentiation of fiscal capacity observed in 2017-2019 between better-off regions and worse-off regions (tax and non-tax revenues of better-off regions grew faster) changed. Based on the results of January-April 2020, the growth rates of tax and non-tax revenues of worse-off constituent entities turned out to be higher than those of the groups of better-off ones.Despite the slowdown of budget revenue growth, in January-May 2020 regional budget expenditures increased by 18.7% on the relevant period of 2019 (by 19.6% in May, which factor is a continuation of the April trends and related with the implementation of the package of anti-crisis measures. A shift in the expenditure pattern towards investments was justified by active application of budget funds for these purposes