UrBC, Moscow, November 13, 2018. The international rating agency Standard & Poor’s Global Ratings believes the Russian federal constituencies and town councils’ fund control system to be unstable and poorly balanced, even though it has been improving, Interfax reports.

On the positive side, both the local governments within the federal constituencies and town councils are sufficiently transparent and highly reliable in their presentation of their budget performance and debt burden. The budgeting process is also an institutionalized one; besides, the local authorities always have the federal government’s support within their reach.

Still, the federal constituencies/municipalities are highly unpredictable and tend to change their fiscal policies too often, S&P GR claims. Besides, the local governments have very limited ways to influence the federal government’s policy on their local funds, which is also a down-playing factor.

The agency’s analysts believe that in the medium term, the local budgets’ balance of income and expenditure might improve through more consistent fiscal discipline and further state support, even despite the current expense burden and slow economic growth.