BOFIT Viikkokatsaus / BOFIT Weekly Review 2020/23
Mikhail Mishustin’s economic recovery plan hopes to reach a sustainable long-term growth path by the end of 2021. Over the next year and a half, the government would also strive to bring employment at small and medium-sized enterprises back to pre-crisis levels, while reducing unemployment and poverty generally.
Mishustin noted that his plan includes around 500 measures and carries a price tag of 5 trillion rubles (about 5% of GDP) for 2020–2021. As details of the plan have yet to be released, it is unclear what kind of measures the costs actually include and how the implementation of the plan will affect the government budget in practice.
Media reports suggest that most of the programme consists of previously agreed support measures and budget spending already included in the current budget framework (e.g. public procurements and national projects). The release of some previously planned budget spending seems to be, however, accelerated slightly. In addition, the plan proposes changes that should improve efficiency of Russia’s social security system, increase labour market flexibility, promote a digital economy and limit imports in procurements by the public sector or state-owned enterprises.
President Vladimir Putin said that the plan provides a foundation, but government must continue working on the plan before launching specific actions at the beginning of July. Putin also ordered the government to prepare proposals on adjustments in implementation of national projects required under the current economic circumstances.