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Roscongress Foundation and Expert RA diagnosed the economy in Russian regions

10 March

The Roscongress Foundation and Expert Rating Agency are set to publish a report titled ‘Economic health of Russia’s regions: positive outlook.’ The report uses integral estimates to evaluate current and future economic development of Russian regions in 2019. The project is carried out as part of the cooperation between the Roscongress Foundation and Expert RA.  

The first edition of this project was presented last year at the Russian Investment Forum in Sochi where Expert RA acted as an Intellectual Partner of the Roscongress Case Zone.

“The Roscongress Foundation aims to promote regional social and economic development. In this regard, this report is of great importance to both regional governments and business communities – in other words to everyone interested in the development of business activity in Russia. The report provides an unbiased estimate of the current economic situation in the regions and its potential,” said Alexander Stuglev, CEO and Chairman of the Roscongress Foundation.     

Different regions have been evaluated against three index groups: economic health of the population, regional business, and consolidated regional budget.

Expert RA analysts point to a number of positive trends that improved regions’ economic health in 2019. For instance, low inflation and gradual wage growth contributed to people’s financial wellbeing. Growing share of freed up funds allowed the population to purchase goods and services outside the required minimum bracket. However, the underdeveloped regions suffer from hurdles created by raising consumer prices, unemployment, and low consumer activity per capita.

Regions that vigorously promote investment, possess multiple efficient large companies and fairly developed small business find themselves in the leaders of the current regional economic health rating. Additionally, the leading regions demonstrate progress in real estate construction. This can attest for popular demand, including attracting buyers from neighboring regions, as well as for the presence of infrastructure in construction, energy, finance, etc.   

According to Expert RA, economic health of consolidated budget is showing positive trends for two years in a row. Tax collection is growing, albeit not as fast as the year before, yet the debt servicing costs are going down. Regions have benefited from interest rate decrease and diversified their credit portfolios.    

“Integral estimates allow us to talk about positive developments in the regional economic health. Correlation between top and bottom of the list improved compared to the year before, despite the sustained high differential in economic development and living standards,” said Gulnaz Galieva, Senior Director for Corporte and Sovereign Ratings at Expert RA.

Top 10 regions have barely changed, yet some have traded places. The leading regions include Moscow, Sakhalin and Tyumen Regions, Yamalo-Nenets and Khanty-Mansi – Yugra Autonomous Areas, and St. Petersburg.

For the second year in a row the leading regions showed positive dynamics. Noteworthy, those on the bottom of the list have also demonstrated growth. Compared to the previous edition, this year’s rating included two additional categories of economic health: moderately high and moderately low.

Index of regional economic development is used to evaluate current development level in the Russian regions (current state map) and to track changes (dynamics map). The map allows to see the differentiation of regions according to the current development level. Dynamics map illustrates which regions are improving, and which are not.

The report titled ‘Economic health of Russia's regions: positive outlook’ is available in the ROSCONGRESS.ORG Information and Analytical System. 

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