Sverdlovsk spent deferred debt on war payments

On 3 November the official portal published decree No. 672-PP of 29 October, approving the main directions of Sverdlovsk oblast’s state debt policy for 2027 and the planning period 2028 and 2029. Twelve pages, signed by the acting governor, A. Shmykov, scanned without a text layer; we read them as images in this session.

In August we reported that decree No. 1095 moved regions’ 2026 budget-credit repayments to 2030. That decree said what the regions no longer had to pay. It did not say what they should do with the money. Sverdlovsk says what it did with its share, in the second section of its own normative act:

“Repayment of part of the one third of the debt from the consolidated sum of debt in the amount of 3.1 billion roubles, planned for 2026, has been moved to 2030. The funds freed as a result of moving to a later date the repayment of part of the one third of the debt from the consolidated sum of debt have been directed to social support measures connected with the conduct of the special military operation.”

Three point one billion roubles that Moscow was due to collect this year, and did not, named in the region’s own text as money for war-related payments.

The deal this comes out of

In 2025 the oblast signed a single supplementary agreement with Minfin — the decree calls it the YeDS — consolidating the debt on budget credits it took between 2010 and 2022. The terms, as the document states them:

The write-off of the two thirds is conditional on the freed money going to measures of the oblast’s state programmes, and the decree lists the permitted purposes in this order: housing and utilities, resettlement of citizens from unsafe housing, purchase of rolling stock for public transport, new investment projects, recapitalisation of the oblast’s Fund for Technological Development of Industry, and “social support measures connected with the conduct of the special military operation”. Each measure requires approval by the presidium (headquarters) of the Government Commission on Regional Development.

That machinery has already run: write-offs under the agreement cancelled 5.2 billion roubles of the oblast’s budget-credit debt in 2025 and 2026, of which 2.6 billion fell in 2025.

The 3.1 billion in the quoted sentence is a different part of the same deal. It belongs to the one third that must be repaid — the part the write-off does not touch — and it moved because decree No. 1095 moved every region’s 2026 instalment to 2030. The write-off has a list of permitted purposes attached to it. The deferral, as published in August, has none. This is the first region we have read that states where the deferred money went.

This is not a distressed region

The reason the sentence matters is the balance sheet around it. Sverdlovsk is the opposite of the regions this autumn’s documents have shown borrowing from banks.

The figures are the decree’s own, rounded from millions of roubles to one decimal, so the components do not always add to the printed total: in the earlier column they do, in the later one they do not.

The debt fell 15.7 billion roubles, or 17.0%, in a year in which the oblast drew no new market borrowing at all. Debt load went from 21.5% of revenue excluding gratuitous receipts to 17.2%, and the market part of it from 5.3% to 2.6%. Servicing cost 1.9 billion roubles, a third less than in 2024 and 0.4% of all spending. The weighted average time to full repayment of the portfolio was 11.8 years at 1 January 2026, against 6.3 a year earlier. ACRA confirmed AA+(RU) in April 2026 and Expert RA ruAA in June; Minfin’s 2025 assessment placed the oblast in the group of regions with a high level of debt sustainability.

Yesterday’s document came from Murmansk, which owes 57.6% of its debt to banks and pays 7.4 billion a year to service it. Sverdlovsk owes banks nothing and pays 1.9. Both of them route the federal relief scheme the same way.

What actually closed the 2025 deficit

The oblast finished 2025 with a deficit of 34.2 billion roubles, or 7.7% of revenue excluding gratuitous receipts. The decree is explicit about what paid for it:

“The deficit was in fact covered by reserves in the form of balances on the single budget account, formed thanks to the countercyclical budget policy conducted in preceding years, which made it possible to avoid attracting expensive market borrowing.”

The gap it covered has a shape. Tax and non-tax revenue grew 3.6% to 446.3 billion, but the two halves moved in opposite directions: personal income tax +15.7% to 174.9 billion, profit tax on organisations −13.0% to 136.6 billion. Spending grew 13.5% to 525.4 billion, and the social block inside it grew 19.5% to 356.9 billion — the line called “social policy” by 35.0%, to 141.2 billion.

A region whose profit-tax base is contracting, whose social spending is growing a third a year, and which has decided not to borrow, pays the difference out of the cash it had saved. The deferred 3.1 billion is a second instalment of the same logic: money not sent to Moscow is money that does not have to come out of the balance.

The cash pays better than the debt costs

One pair of figures from the same section is worth setting side by side. In 2025 the oblast earned 15.1 billion roubles placing temporarily free budget funds on bank deposits, at a weighted average rate of 19.6% a year. In the same year it paid 1.9 billion to service its entire debt.

The oblast earned roughly eight times as much on its idle cash as its debt cost it to service. That is a real benefit of having no market debt, and it is also a measure of how much money was sitting in the account rather than being spent. Both halves of that are now in decline: deposit income is falling as rates come down, and the balance itself is what covered last year’s deficit.

The oblast writes “consolidation” into its own goal

Chapter 4 sets the objective for the three years the policy covers:

“In 2027–2029 the main goal of debt policy will be to ensure and maintain the long-term stability and sustainability of the budget system of Sverdlovsk oblast under conditions of the necessity of budget consolidation, through effective management of the state debt.”

The conditions it expects to work in are listed in chapter 3: the Bank of Russia maintaining tight monetary conditions, restrained growth of the oblast’s revenue, the need to meet national development goals and social obligations to the population — and a decline in the liquidity of the oblast budget. The same item returns as the second entry in the risk register of chapter 6, after the risk of a deficit significantly above forecast.

Chapter 5 lists the instruments for 2027–2029 as budget credits, the oblast’s own medium- and long-term securities, and credits from credit institutions — the last of which the oblast has not used at all for two years — with the stated principle of “absolute priority of budget credits as an instrument for topping up the balance on the single account of the oblast budget over market types of borrowing”.

The agreement with Minfin sets the terms under which the oblast could return to the market. Market debt, counting the debt of municipalities in the region, may not exceed 25% of consolidated revenue excluding gratuitous receipts; credits from banks, foreign banks and international financial organisations may be taken only at rates no higher than the key rate plus 2.5 percentage points. That ceiling is the one No. 1095 lowered from plus 3.5 last August. The moratorium on issuing new state guarantees is to be prolonged.

The current year is already running the other way. At 1 July 2026 the oblast’s revenue was 224.4 billion roubles, 1.2% below the same period of 2025, while spending was 235.9 billion, 0.2% above it. Debt stood at 77.4 billion — above the 76.9 billion it had started the year with — of which 65.9 billion, or 85.1%, budget credits and 11.5 billion, or 14.9%, securities. Bank credits and guarantees are still nil.

What this means for the series we track

We measure the consolidated regional budget balance as a rolling twelve-month total for all of Russia’s regions together. It stands at a deficit of 1.466 trillion roubles, scoring 33 of 100 against a pre-war anchor of a 0.661 trillion surplus at the end of 2021 and a registered trouble line at a 2.5 trillion deficit. Our guide to regional budgets explains how the series is built. This decree moves none of it: the regional reading did not change in this morning’s run, and the strength index is 46 of 100, in the stress zone.

What it adds is a destination. When the deferral was published we wrote that payments cancelled for 2026 improve the regional balance without a rouble of new revenue, and that the mirror image lands on the federal deficit as receipts the centre will not collect. Sverdlovsk now supplies the third side of it: in at least one region the uncollected money was spent on war-related social support, and the region that spent it that way is one of the financially strongest in the country.

Who else has written it down

Crimea’s debt policy, published on 22 October, was the first regional act we read that named war spending as the destination of freed funds — booked, in its case, against expenses already incurred in 2024 and 2025, under the clause of the federal rules that exempts regions of low fiscal capacity. For Belgorod the destination existed only in the prime minister’s speech; the order itself said nothing. Ivanovo made write-off its method of reducing debt without naming what the money bought.

Sverdlovsk is the clearest of the four, and the hardest to file under hardship. It attaches the destination to the deferral rather than the write-off, it does so in the completed past, and it does so while reporting no bank debt, no guarantees, an AA+ rating and a debt load falling for a second year.

What we do not know

Under which clause. The federal rules permit directing freed funds to war spending to regions whose estimated fiscal capacity in 2026 before equalisation did not exceed 0.9. The decree does not cite the clause, does not state the oblast’s capacity, and no list of qualifying regions has been published — the same gap we recorded in August. Whether Sverdlovsk qualifies under that exemption, or whether the war line has become a standard entry in these agreements, cannot be established from this document.

How the money divides. Of the 5.2 billion written off and the 3.1 billion deferred, the decree does not say how much went to war-related support and how much to the other five permitted purposes.

How much cushion is left. No balance on the single budget account appears anywhere in the twelve pages, at 1 January 2026 or at 1 July 2026. The reserve that covered a 34.2 billion deficit cannot be sized from this text, so neither can the number of years it would cover another one.

What the oblast plans to borrow. The policy names instruments, principles, risks and limits for 2027–2029, and not a single amount. Those figures belong in the draft budget law, which did not appear on the portal in this window.

What the year is doing. The freshest outturn in the document is 1 July 2026. There are no nine-month figures, so the 1.2% revenue decline is six months old.