Around 65 Russian regions plan to cut spending on investment and infrastructure projects in 2027–2029. Revenues are not growing, while funds are insufficient to cover social benefits, maintain public institutions and meet war-related needs. As a result, local authorities are abandoning some planned projects and construction work.
In 2027, Tatarstan plans to reduce spending by 13% to $6.6 billion, Leningrad region by 2.9% to $3.5 billion, and Yakutia by 2.7% to $4 billion. The cuts will affect investment programmes, repairs and modernisation of municipal infrastructure.
According to forecasts by Russia's Ministry of Finance, regional budgets will receive $331.4 billion in revenue in 2027, while expenditures will reach $342 billion. The deficit is expected to amount to $10.5 billion.
Moreover, Moscow continues to impose new responsibilities on the regions without providing the necessary funding. Local authorities are forced to finance these obligations from their own budgets, diverting money from other programmes.
At the same time, the federal government is revising the rules for providing financial support to poorer regions. Under the proposed changes, Dagestan, Tuva, Ingushetia and Altai Krai would be guaranteed no more than 90% of the subsidies envisaged under the current budget law in 2027, instead of receiving the full amount with indexation.
Even the cancellation of part of their debts on budget loans comes with a condition: the funds released must be spent on priorities determined by Moscow.
Russian regions are gaining increasingly less freedom in how they use their funds, while their budgets are becoming more dependent on decisions made by the federal government. The Kremlin retains the right to determine where money is allocated, leaving the regions to bear the consequences in the form of unresolved local problems.
