Concentration of the tax base in Krasnoyarsk Krai is one of the highest among Russian peers. Industrial concentration is similar to the Khanty-Mansiysk Autonomous Okrug (BBB-/Stable/-; Russia national scale ‘ruAAA’), but unlike the okrug, which is dependent on oil, Krasnoyarsk’s major revenue contribution is from mining and metal production. This production comprises different metals, the prices of which are not perfectly correlated, thus the volatility of commodity prices is somewhat mitigated.
Improved budgetary performance over the past five years means Krasnoyarsk Krai is now at the level of high-performing peers such as the Republic of Bashkortostan, Khanty-Mansiysk Okrug, and Sverdlovsk Oblast. Looking forward, we expect budgetary performance to be less volatile, maintaining at least the average operating surplus achieved in 2004-2006 (at slightly above 10% of operating revenues), and a 7% deficit after capital expenditure at 7% of total revenues, which is good by international standards.
The krai’s current management compares well with those of peers in terms of transparency, disclosure, and commitment to control the deficit and keep debt burden at a low level. Long-term planning, however, needs more sophistication, as with most Russian peers.
