Russian President Vladimir Putin has promised to boost the living standards of his countrymen with big new plans over the next six years.
There’s just — at least — one major problem: His promises aren’t in the budget.
Putin made the comments during his annual state-of-the-nation address on Thursday. He was speaking two weeks before Russia’s presidential election, which he is expected to win against three opponents. A presidential term in Russia is six years long.
Putin’s promises could cost Russia $130 billion more than its current budget, according to analysts’ estimates, per Bloomberg.
The biggest investments Putin is promising include 4.5 trillion rubles, or $49 billion, to upgrade public infrastructure, and 1 trillion rubles to build and renew existing hospitals, per Reuters.
There’s also a 75 billion ruble plan to boost birth rates and life expectancy. Putin called on Russians to have more babies last month to “survive as an ethnic group.”
“We need constant work to improve quality of life of families with children,” Putin said, per Reuters.
It’s unclear where the extra budget will come from. On Friday, Putin proposed changes to the tax system that are designed to result in more taxes from high-income individuals and businesses, per Moscow Times.
Russia’s economy has appeared to maintain resilience amid sweeping sanctions from the West. The war in Ukraine is now in its third year.
Analysts attribute Russia’s resilience to its wartime spending, state subsidies, and its large, globally integrated economy.
Still, Russia has posted two years of budget deficits since it invaded Ukraine.
Dmitry Polevoy, an investment director at London-based Astra Asset Management, told Bloomberg that Russia can afford the extra spending as promised by Putin — unless its economy takes a turn for the worse.
“At first glance, it doesn’t look unaffordable, although if the economic situation is worse than officials forecast, that will require a search for additional sources of financing,” Polevoy told the outlet.
