Problems of Assessing the Debt Sustainability of Federal Subjects of the Russian Federation

Abstract

The increasing debt burden of the budgets of the Russian federal subjects has increased the relevance of assessing debt sustainability. The paper is devoted to the analysis of the dynamics and structure of Russian regional debt burdens. Financial assistance does not ensure the sustainability of regional budgets. The problem of debt sustainability has a significant impact on the economic security of the region since it requires constant monitoring. An effective way to reduce debt dependency is to issue government securities. The government also needs to implement a stimulative policy within the regions so that most debt obligations are formed due to market borrowing. The use of exchange auctions will help minimize the cost of borrowing in the regions. The levels of debt sustainability indicators stipulated by the budget legislation and the ranking system for Russian Federal subjects will allow monitoring the debt situation and timely applying the relevant restrictions and requirements. These measures are primarily aimed at supporting the regions. The parameters of the Stavropol Krai state debt allow us to conclude the average level of debt sustainability and the effective debt policy pursued by the Ministry of Finance of the Stavropol Krai. Given the current situation, the region could achieve high debt sustainability by the end of 2019. In general, the existing approaches to assessing the debt sustainability of the Russian Federal subjects require further development.