Media: government agreed to increase pensions, minimum wage and living wage by 10%

The final decision on this issue, including the level of indexation, will be made by Russian President Vladimir Putin. The topic of indexation of social payments will be discussed at the Presidium of the State Council on Social Affairs, and the meeting is scheduled for May 25. Vedomosti asked the press secretary of the President of the Russian Federation Dmitry Peskov whether the head of state would make a decision on indexing social benefits at this meeting. The Kremlin spokesman replied: "Let's be patient."

“The indexation of the minimum wage by 10% generally corresponds to the task of compensating for the negative consequences of sanctions”, - says Yelena Grishina, head of the laboratory for research on labor markets and pension systems at the Institute for Social Analysis and Forecasting of the RANEPA.

She added that during the year the situation may change, requiring additional indexations. At the same time, a 10% increase in pensions, the minimum wage and the subsistence minimum will also lead to an increase in the entire wage line, but not necessarily by the same amount.

The government is discussing the indexation of social benefits, but earlier the economic situation in the country did not allow to make a decision on this. After waiting for the stabilization of the situation, the authorities may decide to increase social benefits. Indexation is aimed at compensating for inflation in the country.

“According to the sum of indexations for the year, it is theoretically possible to obtain a near-zero change in the purchasing power of social payments and salaries of state employees, if we include in the calculation an increase of 8.6% made at the beginning of the year, but the average salary throughout the economy in real terms will most likely fall by 5 -6% compared to the previous year”, - said Dmitry Kulikov, director of ACRA’s group of sovereign and regional ratings.

He added that additional indexation would cost Russia 0.3 percentage points of GDP in 2022.