Page 11 - RusRPTJun20

on food, housing, and credits, he added.
2.2 ​ ​Russian economic stimulus starts but amounts are too little
A number of anti-crisis measures to support the Russian economy came into effect on May 1, ​but they are too small.
The Russian government has spent RUB3 trillion ($42bn, 2.6% GDP) on economic relief in the coronacrisis. The Russian government is already preparing to lift lockdown and restart the economy, which means there are unlikely to be any new anti-crisis measures. The Bell calculated that the total amount of support for Russia’s coronavirus-hit economy amounted to 2.6% of GDP, up to five times less than the equivalent spending by most Western countries.
On May 28 the government updated its plan, increasing the spend to RUB8 trillion ($114bn) to restarting the Russian economy from 2020-21​, according to the economy ministry’s recovery plan. The plan, which was submitted to the government on May 25, has not yet been published. According to Vedomosti, it envisions RUB6 trillion in budget expenditures or unearned federal revenue (e.g. tax deferrals and debt write-offs) and RUB2 trillion in non-budgetary infrastructure investment.
Already-announced RUB3 trillion of economic support measures from Maxim Reshetnikov are included in the new plan’s total, thus decreasing the headline figure of new spending.
According to sources familiar with the plan, the largest outlays after infrastructure projects will go towards supporting affected industries (RUB1.5 trillion) and supporting the regions (RUB1 trillion). The plan does not promise any major new relief for SMEs or individuals.
On June 1, the government will submit its economic roadmap to the Kremlin, where economic advisors may make further changes.
The government has announced four packages of support for businesses and individuals since the crisis began​, the most recent on May 28. Half of the RUB3 trillion in aid from May 11 is cash handouts, while the rest is made up of tax breaks or the waiving of other obligatory payments.
Small and medium-sized businesses have been the biggest recipients of state support (63% of the total and 30% of the ‘real money’) in the May 11 plan Under an affordable loan scheme, small companies (with up to 500 employees) on a list of vulnerable industries can take out loans to pay staff. If these companies still employ 90% of their payroll by October, they won’t have to repay the loans. The main complaint about this scheme has been that the size of the loans are limited by the official monthly minimum wage of 12,300 rubles ($173), which is four times less than Russia’s average salary.
The second biggest group of recipients in the social part of the plan are those with children and the unemployed (18.2% of the total, 30% of the ‘real money’). All parents of children aged between three and 16 will receive a one-time payment of 10,000 rubles ($140) for each child, and there are subsidies for those in poverty and those recently unemployed. Some economists criticized this as a ‘hidden tax on not having children’, but others pointed out there is a direct correlation between the number of children you have and level of wealth.
11​ RUSSIA Country Report​ June 2020 ​ ​www.intellinews.com