The new social support measures, announced by Russian President Vladimir Putin in his address to the Federal Assembly, will cost an average of 400-500 billion rubles. On this subject writing RBC in reference to the economists interviewed.
According to the publication’s interlocutors, additional funding will be required by such measures as the creation of a state fund to help the families of fallen soldiers and veterans, the payment of maternity capital in the annexed territories, an increase in the minimum wage (minimum wage), the renewal of public transport in the regions and preferential rental housing for defense workers.
According to Dmitry Polevoy, director of investments at Loko-Invest, additional spending for social measures could reach 800 billion rubles. Of these, the cost of paying the mother’s capital will amount to 500-700 billion rubles, another 70-110 billion rubles will go to increasing the minimum wage, Polevoy estimates.
Alexander Isakov, chief economist at Bloomberg Economics for Russia, estimated the additional costs at 200-300 billion rubles. “The message turned out to be two to three times less generous than consensus expectations – around 750 billion rubles of new spending was expected,” he said. According to the chief economist of Alfa-Bank Natalia Orlova, the additional costs will not exceed 500 billion rubles.
Russian Finance Minister Anton Siluanov declared On February 21 all decisions announced by the President will be fully funded. He added that funds to support the annexed territories are already included in the budget. At the same time, there are no plans to raise taxes, Siluanov assured.
RBC notes that in 2021, the measures of the message to the Federal Assembly were estimated at 1.2 trillion rubles, in 2020 – more than 4 trillion rubles.
Vladimir Putin sent a message to the Federal Assembly the day before, on February 21. During his speech, the Head of State announced the suspension of Russia’s participation in the Treaty on Strategic Offensive Arms (START). In addition, as part of the message, Putin offered several initiatives, including proposing to return to the basic system of training in universities, to provide participants of the military operation with regular two-week vacations every six months, and to decriminalize certain provisions of the Penal Code relating to economic crimes. I talked about all the president’s proposals in the RTVI message here.
