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In Murmansk, a growing budget deficit

Like in most Russian regions, a tighter economic situation in Murmansk.

The Russian Arctic region is accumulating debts as spending increases. At the same time, Moscow ups pressure on regional economies.

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Murmansk in the first half of 2014 had a budget deficit close to 20 percent, figures presented recently by regional finance minister Roman Duryagin show. According to the minister, the region in the period spent 24,8 billion roubles while revenues were only 20,9 billion.

The spending part of the budget increased with 18 percent year-on-year from 2013, Duryagin said, adding that higher salaries among regional officials is one of the reasons for the hike, a press release from the regional government reads.

The economic hardships in Murmansk are reflected in an increasingly difficult situation in the national economy. According to newspaper Vedomosti, a total of 35 Russian regions now have debts which exceed 50 percent of their own resources. The situation is worst in seven regions, among them the Republic of Karelia, the newspaper reports.

In spring 2014, President Putin ordered his government to step up support to the regions in need of favourable credits. However, it soon turned out that only the best-managed and most successful regions will be able to meet the government credit criteria.

As previously reported, Murmansk has over several years struggled with budget deficits and slow growth. According to figures from Patchwork Barents, industrial production in the region has been negative for the past three years. Similarly, Murmansk was the region with the slowest pace in residential buildings. Until year 2011, the region still had a positive development within GDP per capita growth.