According to Standard & Poor's, Sverdlovsk Region is currently one of Russia’s most industrially advanced regions (its foreign currency liability rating is ВВВ+/Negative/А-2; its national currency liability rating is А-/Negative/А-2; its national scale rating is ruAAA).

‘The rating growth is hindered by the lack of flexibility and predictability of the budgetary expenses and revenues. Then, the tax revenues might drop due to the slowing down of the economic growth rate over the next few years and the remaining pressure of the current expenditures and the dire need for capital investment,’ says Standard & Poor's analyst Irina Pilman.

‘At the same time, the region’s debts are low, the authorities aim to maintain a budgetary balance in the medium term, and there are a lot of savings in the industrial field, while the welfare levels are high compared with the Russia’s average,’ she adds.

‘The budget’s total revenue growth is expected to slow down by up to 15.8% this year, whereas in 2009, revenues might drop by about 5%. The region has already provided for the cutback on the expenses in its three-year budget plan for 2009-2011, excluding some road construction projects and subsidizing local municipalities as well as pay rises for the public sector workers from the list,’ Standard & Poor's reports.

‘Sverdlovsk Region’s welfare rate is relatively low against the international standards yet it is still above the country’s average. Like most Russian regions, this one has to significantly improve on the quality of roads and the housing and engineering infrastructure. The Stable Rating Outlook reflects our belief that the region’s authorities will be able to avoid an increase in expenses and maintain a balanced budget in 2009-2010, while keeping the current budget surplus at the level of at least 5% of the current expenditures. What is more, the outlook is also based on the assumption that the region’s debts will still be low in the future,’ Pilman explained.