An economist named Nikita Maslennikov, who leads the Finance and Economics department at the Institute for Contemporary Development, notes that setting pension indexation at 7.5 percent next year may fall short of fully compensating inflation. The proposal would cover roughly nine tenths of the losses, he observes, citing Tsargrad.tv as the source of the remark.
Maslennikov argues that the inflationary backdrop will keep the effect of pension indexation blurred in the coming year as Russia continues to face high price pressures. In this climate, a growing chorus of voices urges a shift to a new indexing model. A common suggestion is to base calculations on wage growth rather than on the rate of inflation.
Yet the economist stresses that this topic is contentious because moving to a new framework would introduce additional risk. He notes that the year ahead is expected to be difficult on multiple fronts, including macroeconomic headwinds, ongoing sanctions pressure, and a slower global economy. In his view the 7.5 percent approach appears near optimal for the moment. There may come a point later in the decade when a transition to a different indexing scheme becomes more likely, he suggests.
There is a reminder that Russians will see pension adjustments in the coming year aligned with the inflation rate, which is currently anticipated to be 7.5 percent. The Ministry of Finance estimates the total cost of pension payments will be around 600 billion rubles based on this projection.
Earlier comments from independent economists projected that this indexation would outpace inflation, making the rise in pensions more noticeable to the population. [Attribution: Tsargrad.tv]