Russia's welfare policies need change to cut poverty

Significance

Families with children have been the main beneficiaries of expanded government support during the pandemic. This has helped sustain consumption and mitigated the fall in real disposable incomes. Despite this, the inflexible and complex social security system has not directed funding specifically into poverty reduction.

Impacts

• Because falling living standards can encourage protests, Putin's attention to and frequent adjustment of benefits policy will continue.
• Pensioners will increasingly rely on relatives to avoid abject poverty.
• High profits will cushion banks' rising losses on personal loans.