MOSCOW- Russian President Vladimir Putin ordered his government on Tuesday to study new social support measures to soften the hit from accelerating inflation, after already distributing billions in one-off payments ahead of last month's election.
This year, the finance ministry has channelled nearly 800 billion roubles ($11.12 billion) in social payments to families with schoolchildren, as well as to military personnel and pensioners, mostly ahead of the parliamentary vote.
"I order the government to come up with additional proposals of social support for our citizens," Putin said at his first meeting with the newly elected lower house of parliament, the Duma, on Tuesday.
Putin did not say how big the new payments might be but Russia has the cash to deliver: it ran a budget surplus of $20 billion in the first nine months of the year.
On Tuesday, the economy ministry raised its 2021 inflation forecast to 7.4% from 5.8%, well above the central bank target of 4%, adding pressure on the bank to raise interest rates for the sixth time this year at its meeting next week.
Inflation is nearing its peak but is not expected to fall, Economy Minister Maxim Reshetnikov said, with food inflation the main contributor to rising prices.
As of Oct.6, Russia had harvested only 108.4 million tonnes of grain compared with 125.2 million at the same stage in 2020.
Annual inflation jumped to nearly 7.5% in early October, its highest since June 2016, eating into incomes already dented by the COVID-19 crisis and the weaker rouble.
"We assume that inflation is at its peak, but we do not expect any significant decline due to the situation with the harvest," Reshetnikov said.
Central Bank Governor Elvira Nabiullina said inflationary expectations, an important economic indicator tracked by authorities and which slightly declined to 12.3% in September from 12.5% in August, had not become anchored.
Her deputy Alexei Zabotkin has said the bank will raise rates as high as needed to bring inflation down to its target, signalling a hike at the Oct. 22 meeting.
Reshetnikov said there were no talks under way with retailers to introduce new export duties or curb upper price limits. The economy ministry is keeping its 2022 inflation target at 4%, he added. ($1 = 71.9400 roubles)
(Reporting by Darya Korsunskaya, Andrey Ostroukh and Gabrielle Tétrault-Farber; Writing by Alexander Marrow and Katya Golubkova; Editing by Mark Trevelyan, Catherine Evans and Alison Williams) ((Gabrielle.Tetrault-Farber@thomsonreuters.com;))