Regional Budget Revenues in Early 2022: Main Trends and Risk Factors

The purpose of this paper is to shed light on the impact of 2022 external shocks on Russia’s sub-federal budget revenues and to identify the main revenue side risks that should be considered if sanctions pressure increases. The relevance of the study is determined by the time factor: less than six months have passed since the beginning of the crisis. The authors examine the dynamics of regional budget revenues in 2022 as a whole and provide a detailed qualitative analysis of the situation in eleven regions, selected in accordance with the dynamics of their budget revenues in March-June 2022 (soon after the introduction of sanctions). The analysis shows that regional budget revenues have already begun to respond to the sanctions, however, the external shocks manifest themselves in different regions with different speed. It was revealed that the most vulnerable to the crisis is the CIT, while the PIT is relatively stable. The main risk indicators for regional budget revenues are the share of the extractive sector in GRP, the structure of reginal foreign trade (both by commodity and by country) and the state anti-crisis support of SMEs.