Russia To Devote Extra $67 Billion To Tackle Demographic Crisis

Russian Finance Minister Anton Siluanov said the allocation of additional funds would "not affect budget and macroeconomic stability." (file photo)

Russia plans to allocate an additional 4.13 trillion rubles ($66.7 billion) as part of a nationwide effort to address its dwindling population amid bleak long-term demographic trends.

Finance Minister Anton Siluanov said on January 29 that the bulk of the new spending -- 91 percent -- would come from the federal budget, with the remainder sourced from regional budgets.

"An unprecedented volume of funds will be allocated to the implementation of the pledge to provide citizens with social support," Siluanov said. "These decisions will not affect budget and macroeconomic stability."

Siluanov added that his ministry would send the requisite budget-amendment proposals to the government by February 11, to release the funds as soon as possible.

The new spending adds to the 25.7 trillion rubles ($417 billion) that President Vladimir Putin ordered in 2018 for the government's National Projects, which seek to improve lives in such policy areas as demography and infrastructure.

Putin made ensuring population growth a top priority when he started his current term in 2018 and at his yearly news conference on December 19, the president acknowledged Russia was "haunted" by the demographic losses of the 1990s.

Rosstat, the government's statistics agency, last month predicted Russia's population would shrink in 2019 for the third consecutive year. The decline was foreseen at more than 300,000, a loss three times greater than the previous year.

Government policies include offering payments for low-income families with small children and allowances for first-time mothers.

Families with three children also qualify for $7,350 in mortgage credit.

"I know this isn't enough," Putin said. "We need to broadly increase living standards as a whole, to achieve growth in wages and people's real incomes."

Other main problems contributing to the demographic crisis, according to economist Aleksei Ulyanov, are abortion and the consumption of alcohol and tobacco.

Current UN projections say that, under a "pessimistic" scenario, Russia's population could drop to 124.6 million by mid-century.

With reporting by Reuters