Putin vows to lift Russian salaries and pensions to cushion sanctions

Vladimir Putin has vowed to boost Russia’s minimal wage and the salaries of all public sector employees as a part of measures designed to cushion western financial sanctions triggered by his resolution to wage battle in opposition to Ukraine.

Talking on Wednesday at a gathering about offering assist to Russian areas, the president stated the federal government would additionally improve pensions and state payouts to the deprived as the value of products rose.

“I perceive that rising costs are critically hitting folks’s incomes,” Putin stated by way of video hyperlink. “Due to this fact, within the close to future, we’ll resolve to extend all social advantages.” 

The measures are an early indication of the blow the western punitive measures in opposition to Russia’s banking system, fee community and commerce are beginning to have on the nation’s economic system.

Costs of imported items have soared as the worth of the rouble has plummeted. Panic-buying of staple merchandise has triggered snap shortages in some areas. Russian carmaker Avtovaz on Wednesday stated it was bringing its employees’ scheduled summer time vacation ahead to April “as a result of ongoing disaster within the provide of digital parts and in an effort to keep away from a major discount in worker earnings”.

Putin sought to reassure Russians by insisting there can be no large-scale shortages of products and that the Russian central financial institution wouldn’t have to “print cash” for the reason that nation had adequate price range revenues. He additionally instructed his authorities to cut back the poverty price by the tip of the 12 months.

Whereas he admitted that sanctions would pressure Russia’s economic system, he stated the scenario can be helpful in the long term because it meant changing into extra unbiased from the west.

“After all, the brand new actuality would require deep structural adjustments to our economic system,” Putin stated. “I gained’t conceal that they are going to be tough. They are going to result in a short lived rise in inflation and unemployment. Our activity is to minimise such dangers.”

He repeated claims that the west would have imposed sanctions on Russia no matter Russia’s assault on Ukraine and complained about western nations’ alleged plan to rein in Russia’s growth.

Putin additionally blamed the EU and US for asserting “a really actual default on their obligations earlier than Russia” and stated Russia’s international reserves had been “merely stolen”. He was referring to an earlier indication by Moscow that it will pay two curiosity fee on dollar-denominated bonds in roubles, which credit score companies say would possible quantity to a technical default. Two curiosity funds are due on Wednesday.

Some western firms, similar to McDonald’s and Ikea, have suspended operations in Russia for the reason that sanctions had been established, inserting quite a few jobs in Russia in danger. The Kremlin has recommended it will nationalise some property, describing this as a measure supposed to maintain enterprise working.