RUSSIA is to commit 2.3 trillion roubles (£22bn) to a plan to support its sanction-hit economy.
It comes just days after its debt was downgraded to a “junk” rating by Standard and Poor’s ratings agency.
The government also plans to set up a bad bank to take on troublesome loans from the banking sector.
The announcement came as part of an “anti-crisis” package involving 60 measures to support the economy that was signed by Prime Minister Dmitry Medvedev yesterday.
“This plan is something like a cushion to avoid a rapid deterioration in Russia and support several of the most important economic agents (and provide) social support,” said Sberbank chief economist Yulia Tseplaeva. Official figures released yesterday revealed the extent to which standards of living in Russia were declining.
Russian unemployment climbed for the fourth consecutive month in December. The unemployment rate stands at 5.3 per cent up from November’s 5.2 per cent while the number of unemployed people grew to 3.97m from 3.93m.
Compared to December 2013, wages in roubles increased by 6.1 per cent. But due to the country’s high rate of inflation, real wages – the goods and services that can be purchased with rouble wages – actually declined by 4.1 per cent.
Retail sales jumped by 5.3 per cent year-on-year in December as consumers “panic-bought” imported items they believed would soon rocket in price due to the rouble’s collapse.