Economists estimate the effect of Putin’s plan

Sberbank Investment Research economists have calculated the effect of the increase in social spending proposed by President Vladimir Putin in his Address to the Federal Assembly. According to experts, this spending will not significantly fuel inflation.

After analyzing the increase in government spending to support low-income families this year and plans for the next, economists said it would promote retail trade through raising the level of consumption in this category. At the same time, inflation will not grow by more than 0.2 percentage points, reports.

This year, Russia will allocate RUB 125 bln ($2 mio) to support the poor and another RUB 250 bln ($4 mio) next year. Analysts say spending on stimulating demographics will also increase. However, these policies are unlikely to significantly influence inflation.

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