Putin's promises to Federal Assembly may cost Russia US$130 bn – Bloomberg

The promises which Russian President Vladimir Putin made ahead of presidential elections in Russia may cost Russia tens of billions of dollars during the next six years.

Source: Bloomberg

Quote: "New national projects that Putin proposed in an annual address Thursday to the Federal Assembly, along with initiatives on improving living standards and massive write-offs of loans to Russian regions, could cost the Kremlin’s coffers more than $130 billion that’s not currently accounted for in the budget, analysts estimate."

The analysis conducted by Dmitry Polevoy, investment director at Astra Asset Management, shows such projects could cost Russia as much as 2 trillion roubles per year, or more than US$130 billion over six years. That takes into account not only government spending but also a proposed write-off of two-thirds of the loans provided from the federal budget to Russia’s regions as well as investment in utilities.

Putin’s proposals include the extension of state support to increase birth rate and life durability, as well as investments into the improvement of infrastructure, facilitation of technology development and increase of export of non-oil products. A few other ideas are aimed at the development of human resources as Russia faces an acute lack of workforce which is getting worse due to the war in Ukraine.

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