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Russia’s Putin sets out new social support measures as election looms

Russian President Vladimir Putin announced new social support measures for families with children on Wednesday and hinted at more tax changes, saying the corporate sector was on course for record profits this year.

Addressing falling living standards is one of the priorities for Putin before a parliamentary election due in September. The economy shrank 3 percent last year, its sharpest contraction in 11 years, and inflation hit 5.8 percent last month, its highest level since 2016.

In his annual address to both houses of parliament, Putin said he wanted to ensure an increase in real incomes to fight poverty.

“First of all, the state must provide direct support to families with children who find themselves in a difficult situation,” Putin said.

All elementary and secondary school students will receive a one-off payment of 10,000 roubles ($130.53), while children aged eight to 16 years from families with one parent will start getting on average 5,650 roubles a month, Putin said.

Pregnant women with low incomes will receive on average an extra 6,350 roubles a month, he said, promising to spend 10 billion roubles on repairs of teaching colleges.

Putin’s pledges will cost the budget around 400 billion roubles ($5.24 billion) over two years, Finance Minister Anton Siluanov said.

This year, Russia will receive an extra 1.5 trillion roubles in oil and gas revenues if oil prices average $60 per barrel. A better-than-expected economic performance and a recovery in tax collection will generate another 500 billion roubles in extra non-oil and gas revenues this year that could be used for fresh spending, a deputy finance minister told Reuters.

Putin said this year would see record corporate-sector profits.

“Let’s see how these profits are spent, and with this in mind we will take some decisions on the possible fine-tuning of tax legislation at the end of the year,” Putin said.

Russia has recently raised taxes for individuals with annual incomes over $65,265, applied taxes on bank deposits and targeted the mining, tobacco and oil industries.

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