Putin pledges over $126 billion in public spending as election looms

Russian President Vladimir Putin is set to extend his 24 years as Russia's paramount ruler in an election on March 15-17 and has promised more than 11.5 trillion roubles ($126.5 billion) in infrastructure and social spending over the next six years.

"This is the program of a strong, sovereign country that confidently looks to the future," Putin told Russia's elite, including lawmakers, in a speech on Feb. 29. "We have both the resources and tremendous opportunities to achieve our goals."

Russia's total budget spending in 2024 is planned at 36.6 trillion roubles, with military expenditure set to exceed social spending for the first time this year as Moscow presses on with its war in Ukraine, now in its third year.

The announced measures could cost the budget up to 2 trillion roubles a year, estimated Dmitry Polevoy, head of investments at Astra Asset Management.

"At first glance, it does not look "unaffordable," although, in the case of a more negative economic situation than the authorities predict, this will require a search for additional sources of financing," Polevoy said.

Sinara Investment Bank analysts said the measures imply significant fiscal stimulation of the economy, meaning an imminent tax increase is likely.

Putin has already hinted at raising the tax burden for wealthy individuals and companies.

Reuters