BOFIT Viikkokatsaus / BOFIT Weekly Review 2024/21

President Vladimir Putin was inaugurated to another term as Russia’s president on May 7. He announced the members of his new cabinet and issued his traditional May decrees setting out his goals for the next six-year term in the spheres of economic and social advancement. Putin last week flew to Beijing to meet with Chinese president Xi Jinping.

Changes in the composition of the cabinet and presidential administration

The makeup of the new government and top posts in the presidential administration were announced on May 14. Mikhail Mishustin remained as prime minister. Most of the five new people given posts in the 21-minister cabinet previously served in regional leadership posts.

The economic policy slots saw a couple of adjustments. Anton Siluanov stays on as finance minister and Maxim Reshetnikov as economic development minister. Surprisingly, deputy prime minister Andrei Belousov, who held the portfolio for economic matters, was shifted to the defence minister post. Belousov’s deputy prime minister slot went to former industry and trade minister Denis Manturov. Former economic adviser to the presidential administration Maxim Oreshkin was promoted to deputy chief of staff of the presidential administration.

Observers expect the new government to stick with established economic policies. Serving the wartime economy takes precedence over other economic policies as it does for all Russian government policies at the moment.

More attention to nationalistic goals and self-sufficiency

Putin’s inaugural May decrees provide a general outline of the national goals for 2030 (and preliminarily for 2036) and include a number of more specific measures and benchmark indicators. The May decrees list the national projects to be given priority in the next six years. Detailed plans for these prioritised projects should be prepared by the government by September.

The latest set of national goals are similar to the previous set announced in July 2020, but nationalist policies, patriotism and economic self-sufficiency receive even greater emphasis. The May decrees make no mention of the war in Ukraine and remain a collection of goals ranging from vague aspirations to precise numeric targets. Many of the measures and indicators have appeared in all Russian development programmes over the past quarter century (e.g. increasing the birth rate and boosting R&D spending).

Ever greater attention has been given to the idea of economic self-sufficiency. The decrees call for a reduction in the volume of imports to 17 % of GDP, as well as Russia gaining technological independence in many fields, such as artificial intelligence, space technology and energy technology. Development of agriculture and tourism also get special notice. The government’s goal include increasing agricultural exports by 150 % and tourism exports by 300 % by 2030.

While most of the benchmark targets are unrealistic, Russia has made progress in some of the indicators related to the social sphere. For example, the life expectancy of Russians at birth has risen. Despite the lack of measurable progress for most economic indicators, the benchmarks for several indicators were raised.

Selected benchmark indicators for 2030 national projects

  2013 2022/2023 2030

Birth rate (children per woman)




Life expectancy (years)




Poverty rate (%)




Tourism, share of GDP (%)




Tourism services exports (USD billion)




Imports, share of GDP (%)




R&D spending, share of GDP (%)




Sources: Rosstat, Russian presidential administration.

Technology fields highlighted in new national projects

Projects under the previous set of May decrees other than the unmanned aerial vehicle (UAV) programme end this year, but the new decrees introduce the new national projects for the 2025–2030 period. The measures and financing for national projects were partly set forth already in a presidential order issued at the end of March after Putin’s speech to the Federation Council. The government has an early September deadline for submitting project details.

There are twelve new national projects. Despite their lofty titles, preliminary reports suggest that most project contents are similar to earlier projects, with the exception of prioritisation of specific technology fields. To support the goals of these tech fields, the projects require securing adequate pools of professional talent and R&D geared to the needs of these specific sectors. More general goals such as achieving internationally acknowledged advanced research capabilities and university development are omitted. In practice, most of the money already earmarked for national projects will go to construction activities such as building or refurbishing schools, health centres, sports venues and airports.

The initial scoping of the projects calls for a total of roughly 9 trillion rubles in federal budget funding during 2025–2030 or about 1.5 trillion rubles a year (1 % of GDP based on the finance ministry’s estimate). In 2022–2024, an average of 3 trillion rubles a year from the federal budget was dedicated to implementation of national projects.

From the standpoint of federal budget financing, the planned spending increase would have a limited impact on the federal budget. As planning for national projects moves ahead, however, the ultimate funding requirements could rise dramatically. The Central Bank of Russia has already warned that this could increase inflation risks. Any major spending increases would likely also require additional funding sources.

Putin and Xi sign a joint statement on deepening their strategic partnership

President Putin and his entourage of ministers kicked off his new term with a 2-day visit to China on May 16 and 17. Xi and Putin signed a joint statement calling for increased strategic cooperation in a number of fields. The parties also signed ten other cooperation-related documents, including an agreement on creation of a cross-border protection zone for large felines and documents on veterinary and phytosanitary inspections related to Russian exports of pork products and sunchokes. The national news bureaus TASS and Xinhua penned an information exchange agreement.

No major new economic initiatives was published after the meeting. Since Russia’s full-scale invasion of Ukraine, China has become Russia’s most important economic partner by far. Russia-China economic relations still mainly involve trade, and tightening Western sanctions have complicated trade in recent months (BOFIT Weekly 20/2024). The investment of Western companies in Russia that was lost after the Ukraine invasion has yet to be compensated for by Chinese investment. While there is in general much uncertainty related to statistics on bilateral figures on direct investment, none of the statistical series indicate a substantial increase in Chinese investment in Russia. According to the China Global Investment Tracker published by the American Enterprise Institute and the Heritage Foundation, data collected from media and company reports suggest that China has not made a single significant investment in Russia since 2021.

China’s foreign investments in Russia have dried up in recent years
Sources: China Global Investment Tracker, BOFIT.

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