The credit rating of the Tyumen Region stems from the minimal risk level of debt load and high level of budget liquidity. The rating is supported by the high flexibility and the fiscal balance of the budget combined with a large share of capital expenditures, as well as fundamental reserves of the regional budget.
Tyumen Region’s economy is defined by the high level of GRP per capita. From 2016 to 2018, its average value was 1.4 times higher than the average value for the country.
The basis for the Tyumen Region’s economy is hydrocarbon industry, which provides most of the tax revenue. The substantial part of tax revenue comes from the public sector, R&D, construction, wholesale commerce, as well as land transportation and pipelines.
Tyumen Region’s budget is defined by the high share of its own income in the total income volume (excluding subventions). Its average ratio in 2017-2021 is 97%.
The share of capital expenditures in the total income (excluding subventions) in 2017-2021 is 28%. The region finances 94% of its capital expenditures from its own funds.
Considering this year’s unfavorable macroeconomic conditions, ACRA believes that tax and non-tax revenue of the regional budget may decrease by 26%. However, high flexibility of budget expenditures, low level of debt load, and the significant amount of accumulated liquidity will support the regional budget.
The debt load level for the budget is minimal. The amount of accumulated liquidity far exceeds the liabilities.
The ‘stable’ estimation assumes that the rating is highly likely to remain unchanged for the next 12 to 18 months.
The next rating revision is expected to be performed within 182 days from the ACRA’s press-release date, in accordance with the Calendar of planned sovereign credit rating revisions and publications.