Factbox-Putin pledges over $126 billion in public spending as election looms
As President Vladimir Putin gears up for an election scheduled for March 15-17, aiming to extend his reign as Russia’s paramount ruler to 24 years, he has announced a substantial public spending plan. More than 11.5 trillion roubles ($126.5 billion) have been pledged for infrastructure and social initiatives over the next six years.
“This is the programme of a strong, sovereign country that confidently looks to the future,” declared Putin during a speech, addressing Russia’s elite, including lawmakers. He emphasized the nation’s abundant resources and tremendous opportunities to achieve set goals.
The fiscal year of 2024 will see Russia’s total budget spending earmarked at 36.6 trillion roubles. This year, for the first time, military expenditure is set to surpass social spending as Russia continues its military operations in Ukraine, now entering its third year.
Dmitry Polevoy, head of investments at Astra Asset Management, estimates that the announced measures could burden the budget by up to 2 trillion roubles annually. Though he hints at its feasibility, he also notes the potential need for additional financing should the economic situation worsen more than predicted.
Analysts at Sinara Investment Bank interpret these measures as indicative of significant fiscal stimulation for the economy, suggesting that a tax increase could be on the horizon, with Putin already hinting at a heightened tax burden for the wealthy and corporations.
Here’s a closer look at some of the key spending initiatives Putin has outlined as part of his run-up to the forthcoming election:
INFRASTRUCTURE
- Allocating 4.5 trillion roubles for public infrastructure modernisation, including housing and communal heating;
- 1 trillion roubles dedicated to hospital construction, repairs, and equipment;
- 400 billion roubles for the overhaul of schools and kindergartens;
- 400 billion roubles on university campus construction;
- 360 billion roubles for parks and public spaces;
- 250 billion roubles to modernise airport infrastructure;
- 120 billion roubles on constructing residential areas;
- 100 billion roubles to update cultural institution infrastructures like museums and theatres;
- Extending a preferential family mortgage programme at a cost of 1.5 trillion roubles over the next six years;
- Maternity capital programmes expansion costing an additional 600 billion roubles by 2030;
- 100 billion roubles on social payments for families with children;
- At least 75 billion roubles allocated to regions with below-average birth rates by 2030.
INDUSTRY AND TECHNOLOGY
- 700 billion roubles for the creation of digital platforms across key economic and social sectors;
- 300 billion roubles to the Industrial Development Fund for supporting high-tech projects;
- 200 billion roubles for subsidizing industrial production project interest rates;
- 120 billion roubles in subsidies for scientific research and industrial mortgages to companies;
- 116 billion roubles towards high-speed internet access and satellite build-up.
REGIONAL SUPPORT
A major relief plan for Russian regions involves writing off two-thirds of their debt on budget loans, enabling an estimated savings of about 200 billion roubles annually from 2025 to 2028.
The comprehensive financial commitment outlined by Putin comes at a crucial time, reflecting a strategic maneuver to strengthen his political position and address various national development and welfare needs as the forthcoming election draws nearer.
