The FIFA World Cup, taking place in June-July in Russia, will worsen the creditworthiness of Russian regions, international rating agency Fitch warns in a review on Monday.
Although the cost of building sports facilities was paid by the federal budget and private investors, and the infrastructure created by the 2018 World Cup in the form of roads and airports should theoretically strengthen the potential for economic growth, for regional budgets, football facilities can be a burden.
After the end of the championship, the sports infrastructure will require constant expenses. But "some regions do not have the financial capacity to maintain their facilities in the long term," warns Fitch.
Large and rich regions, such as Moscow and St. Petersburg, will be able to spend about 400 million rubles, or 6.4 million dollars a year, on the maintenance of sports facilities without affecting solvency. The annual revenues of these cities, as a rule, exceed 150 billion rubles, or 2.4 billion dollars.
"For small or financially weak regions, the additional costs for maintaining stadiums will be a significant burden, since their annual revenues range from 35 billion to 85 billion rubles," the Fitch said in a review.
An example of such a region is Mordovia, the agency notes with economic growth below the average, the republic has "a significant debt, a low operating balance and a weak institutional environment."
The regional budget deficit an average of 18% of its volume, and at the peak level - in 2017 - reached 27%. The reason was "significant capital expenditure associated with the World Cup."
The total amount of government spending at the World Cup 2018 in Russia amounted to 618 billion rubles, 19 billion rubles more than the original estimate, analysts estimated the consulting company JLL. According to the total cost of the championship, Russia has become the leader among all host countries of the world football championships over the past 10 years. The World Cup cost taxpayers as much as it is allocated to the entire system of higher education for the year (626 billion rubles).
In terms of economic growth, the championship will turn into a loss for Russia. According to the Central Bank, he will be able to accelerate GDP only by 0.1-0.2%, or 183 billion rubles in monetary terms, which is three times less than spent on football.