According to ABN, Russia has announced additional indexation of the minimum wage (MMW) and subsistence level (SL), Alexey Vedev, Head of Financial Studies Department of Gaidar Institute, believes that such support measures may prove insufficient in the context of disproportionate price growth, a possible drop in living standards, and a 20% key rate.

Vladimir Putin has announced an increase in the minimum wage, living wage, social benefits, pensions and salaries in public sector. The need is justified by a sharp rise in prices, which has an extremely negative impact on the incomes of individuals. According to the President, the relevant changes will be reflected soon in the legal framework. As a reminder, the federal minimum wage was Rb13.890 per month after indexation in 2022.

The degree of uncertainty in the economic situation has now reached a high level and does not allow for precise quantitative estimates, said Alexey Vedev.

"We should expect unemployment to rise and living standards to fall," the expert forecasts, "but there are reasons to expect that the budget will be executed at a sufficiently high level with high prices for rare earth metals, oil, gas, etc."

The role of the budget is increasing and the population needs the state financial support, Alexey Vedev is convinced. He said that growth in the minimum wages may not be a one-time measure, but rather it may be repeated several times depending upon the circumstances. Moreover, this can be both additional indexation and one-off payments, the economist added.