From January 1, 2023: Putin signed the law on the indexation of the subsistence minimum to 14,375 rubles

From January 1, 2023, the cost of living (PM) per capita in Russia will increase by 3.3% - from 13,919 to 14,375 rubles.

The corresponding law on Monday, December 5, was signed by President Vladimir Putin.

According to the document, for the able-bodied population, the PM will be 15,669 rubles, for pensioners - 12,363 rubles, and for children - 13,944 rubles.

According to the Ministry of Labor and Social Protection, in total, the indexation of the indicator will increase material support for about 15 million Russians.

“The subsistence level is used in the means assessment.

In addition, the size of social benefits depends on the subsistence minimum.

With an increase in this value, the amounts of payments for needy families with children, a social contract in a number of areas, as well as federal and regional social supplements for pensions increase, ”the department explained.

Also from January 1 in Russia it is planned to index the minimum wage (minimum wage).

It is assumed that the value will increase by 6.3% - from the current 15,279 to 16,242 rubles.

Note that the minimum wage sets the minimum wage that a full-time employee can receive.

In addition, the indicator is used to calculate benefits for temporary disability, as well as for pregnancy and childbirth.

As recalled in the Ministry of Labor, since June 1, the minimum wage and PM have already been increased by 10%.

Thus, the re-indexation of indicators from January 1 will partly compensate citizens for the rise in prices that occurred this year, the ministry believes.

“The aggregate growth rate of basic social guarantees will be higher than the projected inflation of 12.4%.

The total annual growth of the subsistence minimum will be 13.6%, and the minimum wage - 16.9%," Labor and Social Protection Minister Anton Kotyakov said in September.

As a result of indexation of the minimum wage and PM, the solvency of the population should increase, which may have a positive impact on the economy as a whole.

This opinion was shared with RT by Georgy Ostapkovich, director of the Center for Market Research at the Institute for Statistical Research and the Economics of Knowledge at the Higher School of Economics.

“In this case, the Russians start spending more, which means that consumer demand is growing, the production of goods and services is increasing, which ultimately has a positive effect on GDP.

At the same time, if a person receives less than the subsistence minimum - for example, he cannot work full-time all day, then the state pays him extra so that his total earnings are at the level of the PM, ”explained Ostapkovich.

Financial plan

Also on Monday, Vladimir Putin signed the law "On the federal budget for 2023 and for the planned period of 2024 and 2025."

As follows from the document, the income of the Russian treasury will increase throughout the entire three-year period.

In 2023, they should amount to 26.13 trillion rubles, in 2024 - 27.24 trillion, and in 2025 - 27.98 trillion.

Meanwhile, budget expenditures will grow only over the next two years, and then decrease somewhat.

So, in 2023, it is planned to spend almost 29.06 trillion rubles from the treasury, in 2024 - about 29.43 trillion, and in 2025 - 29.24 trillion.

Thus, for all three years, government spending may exceed revenues, but this difference will gradually decrease.

In 2023, the budget deficit is expected to be 2.93 trillion rubles (2% of the country's GDP), in 2024 - 2.19 trillion (1.4% of GDP), and in 2025 - 1.26 trillion ( 0.7% of GDP).

It should be noted that the budget for the next three years has been drawn up on the basis of the socio-economic development forecast.

According to government estimates, after a 2.9% contraction in 2022, Russia's GDP will decline by another 0.8% in 2023, but will return to growth in 2024 and 2025 and will add 2.6% annually .

At the same time, inflation will have to slow down from 12.4% in 2022 to 5.5% in 2023 and 4% in 2024-2025.

As Vladimir Putin noted earlier, the current changes in the Russian economy and current trends in global markets are of a long-term nature.

In this regard, the country's leadership should use systemic mechanisms and provide effective responses to challenges for the entire sphere of public finance, the head of state emphasized.

“It is important for the next three years, and in the future, to maintain a line on the stability and balance of the federal budget, which will allow us to confidently and consistently solve the set tasks of modernizing the economy and the social sphere, strengthening infrastructure and supporting regions, and other important areas of the country's development,” Putin said.

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According to State Duma Chairman Vyacheslav Volodin, the approved draft budget has become the most difficult in recent years.

Since sanctions and the development of the world economy are almost impossible to predict, when preparing the document, it was necessary to provide for its flexibility and at the same time reliability, the parliamentarian explained.

“As a result, we managed to guarantee the fulfillment of all social obligations to citizens: more than a third of the budget in 2023 will be directed to social spending ... Support has been provided for military personnel participating in a special military operation and their families.

Additional funds have been found for the development of the countryside, regional road and transport infrastructure, and key sectors of the economy,” Volodin said.

The Federation Council also noted that the conditions for preparing the budget were extremely stringent.

Nevertheless, compared with the period before the coronavirus pandemic, the approved project even includes a slight increase in social spending, primarily on healthcare, education, and culture.

This was announced at the end of November by Anatoly Artamonov, chairman of the Federation Council committee on budget and financial markets.

“The budget, although formed with a deficit, nevertheless ensures the fulfillment of all social obligations of the state and is aimed at creating conditions for the structural restructuring of the economy, increasing the technological independence of the state,” Artamonov noted.

According to Russian Finance Minister Anton Siluanov, the regions will receive additional subsidies from the budget.

Thus, it is planned to create a margin of safety for the subjects of the country and provide them with the necessary amount of resources to fulfill social obligations to the population.

“We are talking about raising the minimum wage, the subsistence minimum, and launching next year a new system of the so-called universal allowance for families with children.

This requires both federal and regional participation,” the head of the Ministry of Finance explained.

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"We have resources"

It is planned to compensate for budget expenditures over the next three years mainly through borrowing.

At the same time, the government intends to borrow money mainly on the domestic market, so the level of Russia's public debt will continue to remain at a safe level (less than 20% of GDP).

“This approach will make it possible not to spend the funds of the National Wealth Fund (NWF) ... to provide more active support to the economy during the period of adaptation and restructuring of economic ties, on the one hand, and on the other hand, it will contribute to sustainable development and structural changes in the medium term, maintaining confidence in the macroeconomic policy pursued by the state,” said Prime Minister Mikhail Mishustin.

As Nikita Maslennikov, head of the Finance and Economics department at the Institute of Contemporary Development, explained to RT, the expected budget deficit is primarily related to the consequences of the pandemic and sanctions restrictions against Russia.

Under these conditions, the state needs to support the corporate sector and citizens, which requires large-scale injections of money into the economy.

“Money from the NWF for these purposes will not be spent seriously and will be used to finance infrastructure projects that are designed to restart the economy.

Borrowings are not so critical from the point of view of their current volume.

Therefore, in general, our budget has been drawn up with a maximum margin of safety and minimal risks, ”said Maslennikov.

Moreover, in case budget expenditures still turn out to be higher than expected, the authorities have sufficient reserves to cover the deficit.

The former head of the Accounts Chamber Alexei Kudrin spoke about this in an interview with RT.

“The budget deficit may turn out to be higher than forecasts due to uncertainties and, perhaps, the emergence of more difficult situations with energy exports.

On the other hand, Russia has a large margin of safety, primarily in the form of reserves accumulated in previous years, including from the successful sale of oil.

Therefore, in the next three years, we can not worry that Russia will have a difficult time.

Of course, we have the resources to cover the budget deficit,” Kudrin stressed.