Regional Budgets: Debt Reductions Amid Austerity

Abstract

In May–June 2016, there was an insignificant growth of regional revenues together with restraint of spending growth, which resulted in contraction of regions’ public debt. Moreover, tight commercial loans were partially replaced by the budget loans. In the meantime, overall low income growth rates commenced since the turn of the year and restrictions on borrowings will not allow regions to achieve positive growth rates of budget spending in real terms and, thus, depart from the austerity policy.