Natalya Vasil'evna Zubarevich

REGIONS IN Q1 2016: ADAPTATION TO THE NEW REALITY

Q1 2016 as H2 2015 demonstrated that the crisis in the regions has turned into a slow rolling phase. Everybody is gradually adap ng to the new reality: industry, labor markets, and the popula on, which is cu ng consump on in line with falling income. Regional picture has become even more eroded: the recovery growth with its drivers is nowhere in sight and the regions aff ected by the crisis to a greater degree have already passed the slump stage and are gradually adap ng to inferior quality of life.

Russian Regions: ongoing slow-rolling crisis

In Q1 2016, the regional view of the crisis changed insignificantly. Decline of population’s income and consumption posted in the majority of regions remain the most acute issue. The тumber of regions which register ongoing investment decline has somewhat fallen. This being said, 2/3 of regions reduce the volume of housing construction. At the same time, fewer regions post industrial recession. The state of regions’ budgets has not changed. As year earlier, 2/3 of regions boasted of the deficit and by the end of 2016, their number will grow. The debt volume has not declined, the list of debtladened regions remained unchanged and the debt pattern saw a reduction of tight credits at the expense of budget loans extended by the Finance Ministry.