Putin has ordered an increase in pensions and the minimum wage

Rubles / EPA

The Russian president Vladimir Vladimirovich Putin today ordered a 10 percent increase in pensions and the minimum wage to mitigate the effects of inflation felt by the Russians, but denied that the country's economic problems were linked to the war in Ukraine, writes Reuters.

With annual inflation close to 18 percent last month, the Kremlin leader acknowledged that 2022 would be a "difficult" year for the Russian economy.

"When I say 'difficult', it does not mean that all these difficulties are related to the special military operation," Putin told a televised meeting of the State Council in Moscow.

"Because in countries that do not carry out any operations - say, abroad, in North America, in Europe - inflation is comparable and, if you look at the structure of their economies, it is even higher than ours."

His comments ignored the fact that rising inflation in Western economies was partly a direct consequence of the Russian war in Ukraine, which pushed up energy and food prices around the world.

The increase in pensions takes effect on June 1, while the increase in the minimum wage begins on July 1. Analysts say the move will not prevent a sharp drop in real incomes.

Russia's economy has been rocked by a series of severe Western sanctions over its decision to send troops to Ukraine on February 24, raising consumer prices and forcing foreign companies to flee Russia as trade becomes almost impossible.

The minimum wage in Russia is currently 13.890 rubles ($ 250) a month, while the average pension is 18.521 rubles a month.

The increase in wages and pensions could complement the inflationary pressures that the central bank sought to limit by raising interest rates by an extraordinary 20% at the end of February as the ruble's exchange rate fell. It has since halved its rate since the ruble recovered.

Finance Minister Anton Siluanov said the measures would cost the federal budget about 600 billion rubles ($ 10,5 billion) this year and about 1 trillion rubles in 2023.

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