Putin wants to boost consumption - and give pensioners more money

Created: 04/18/2022, 20:01

The pool photo released by the Russian state news agency Sputnik via AP shows Vladimir Putin, President of Russia (archive image) © Mikhail Klimentyev/Pool Sputnik Kremlin/AP/dpa

The West is sticking to numerous sanctions against Russia because of the Ukraine war.

Putin calls this a "lightning war" - which has failed.

Moscow – Russian President Vladimir Putin* has asked the government to raise the incomes of civil servants and pensioners, as well as social benefits.

They should be adjusted for inflation, the Kremlin chief said on Monday (April 18) at a government meeting held via video.

He stated inflation* at 17.5 percent.

Overall, the economic situation has stabilized, said Putin almost two months after the start of his war against Ukraine.

He accused the West of having waged a "lightning war" against Russia's economy with its sanctions.

This had failed.

Putin in the Ukraine war: Fresh money for the economy

Putin instructed the government to pump fresh money into the economy to boost consumption.

"Now it is extremely important to support domestic demand, prevent it from contracting excessively," he said.

The government can use budget funds directly for this purpose or use them as credit aid.

The funds are available because in the first quarter of the year "a budget surplus at a record level" was achieved.

Sanctions against Russia because of the Ukraine war: Inflation is likely to rise significantly

Following Russia's February 24 attack on Ukraine, the West imposed unprecedented economic sanctions on Moscow.

According to the World Bank, Russia's gross domestic product will shrink by 11.2 percent this year, which would be the sharpest slump since 1994. According to economic experts, unemployment and inflation will rise significantly in 2022.

The inflation rate is expected to be around 20 percent.