Putin’s pre-election social payments may cost $6.75 billion, add to inflation

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Putin’s pre-election social payments may cost $6.75 billion, add to inflation

A one-off pay-check in social payments to Russian soldiers and pensioners, announced by the Russ President Vladimir Putin on last weekend, ahead of an election next month could lead to a $6.75 billion in additional budgetary spending, a senior lawmaker in Duma, Andrei Makarov, had said this week.

In point of fact, latest remarks from the Chair of Duma’s budgetary committee, Makarov, came forth days after Putin had said in a statement that the country’s military personnel alongside pensioners would be handed out a one-off pay-check of 15,000 roubles ($200) and 10,000 roubles respectively, aimed at helping grapple with a sky-scrapping inflation-surge, as the country’s core inflation indicator has been hovering at 6.5 per cent on a yearly basis, well-above a Russ Central Bank’s target of 4.0 per cent.

Putin’s social payment to militaries and pensioners could cost $6.5bn

Meanwhile adding that the additional expenses in the one-off social payment would be funded from the Government’s additional budget revenue, Makarov said in a statement published in the official website of ruling United Russia Party, “Initial calculations show that processing the payments will require more than 500 billion roubles”.

On top of that, a chief economist at Renaissance Capital, Sofia Donets, was quoted saying followed by the statement, the planned spending might total a whopping 460-480 billion roubles while augmenting a 0.2 percentage point increase in 2021 GDP growth and inflation, too, adding, “This keeps in place the chance that the central bank will decide to raise the key rate by 50 basis points in September and to wrap up the cycle”.