Assessing the impact of commercial lending on the dynamics of regional budget indicators (case study of the Vologda Region)

In recent years, the Russian Federation economy has been under pressure from Western countries, and this pressure is likely to continue for a long time. With the disruption and restructuring of global logistics chains, the departure of foreign companies from Russia in 2022–2023 and the likely difficulties with their return to their former places, global tensions and further potential crises, it becomes clear that the role of the Russian Federation constituent entities as the foundation of the economy is becoming increasingly important. In particular, the state of their budget system, which is able to mitigate crisis risks, retains a high role in economic development. However, an obstacle to the budgetary development of Russian regions may be their debt obligations, the total amount of which, as of January 1, 2025, amounted to more than 15% of the consolidated budgets' own revenues. A particularly heavy burden in the context of the tight monetary policy of recent years is the servicing of debt obligations such as commercial loans (over 7% of the debt structure), which divert significant financial resources to service high interest rates, thereby preventing regional authorities from investing funds in the most important areas. The Vologda Region is among the leading Russian regions in 2019 fully repay the accumulated since the financial crisis in 2009, the debt to credit institutions, which exceeded 100% of own revenues of the consolidated budget of the region in some periods. Based on this, it is of research interest to compare the budgetary development of the region before and after the full repayment of commercial loans, which became the purpose of the work. The study period is 2015–2024, which includes a 5-year interval with commercial loans and a 5-year interval after full payment of commercial loans. The study revealed that until 2019, the share of commercial loans in economic development expenditures reached a peak of 248.9% in 2016, which allowed funds to be released for their effective use after debt repayment in 2019. The research also identified the relationship between the repayment of commercial loans and the growth of budget security per capita, which increased the financing of social and infrastructure projects and affected the growth of average wages in the region.