S&Ps: Half of Russian regions could default in 2013.

By bne IntelliNews October 18, 2012
Standard & Poors believes that as many as half of Russian regions could default already in 2013, due to declining revenue base and execution of the presidential election platform, RBC daily reports. Next year state regional debt is going to increase 1.5-fold, agency believes. According to FinMin data, as of the beginning of the year state debt of regional subject amounted to RUB 1.171tn (USD 38bn), while in 19 regions it was higher than 50% of the revenues. S&Ps sees increasing need for borrowing in mid-term, with accelerating growth rate of debt to be taken on: RUB 500bn in 2012 and at least RUB 700bn in 2013. Agency notes that the regions will have to adapt to declining hydrocarbon revenues, which will be hard politically. At the same time faced with little options for re-channelling funds across spending categories due to federal policies and burden from social obligations taken on by the government and the administration, about half of the regions might face insufficient funds, S&Ps sums up.

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