The Central Bank estimated the impact of one-off payments to pensioners for rates

The implementation of the government’s decision about lump sum payments to pensioners for 5 thousand RUB will require the allocation from the Federal budget 220 billion rubles, reported in the Bulletin “as evidenced by trends,” prepared by the Department of studies and forecasting of the Bank of Russia.

According to experts of the Department, the payment of such amount to the pensioners (in the report of the Department notes their “high propensity to consume”) will lead to a moderate acceleration of inflation in early 2017. The exact size of the increase depends on what will become a source required to conduct a one-time disbursement of funds, noted in the Bulletin.

The most likely option experts Department of the Central Bank consider the reallocation of already budgeted funds. In this case, an additional increase of inflation in the first quarter of 2017 will be approximately 0.15 percent, but in subsequent quarters, when the budget will be reduced, inflation will slow down. In the result, in 2017, no additional gain will be close to zero.

In the case if for the payment of allowances will have to actually increase Federal spending, increase inflation, according to experts of the Central Bank, will be slightly higher.

“Because this scenario involves a greater expenditure in the first quarter of 2017 compared to the baseline scenario and does not imply a reduction in expenses in subsequent quarters of the year, the effect on inflation and economic growth will be more visible and long-lasting”, — stated in the Bulletin.

According to experts of the Department, increasing budget expenditures by 220 billion roubles for the promised payment to pensioners allowance an additional increase of inflation in January—March 2017 will be 0.2 percentage points and at year-end as a whole is about 0.1 p. p.

The Department also notes that the pace of decline in inflation is insufficient in order to the end of 2017 “confident” to come out on stated Central Bank inflation rate of 4%.

The decision to replace the second indexation of pensions in 2016 (the first held in February, when pensions have increased by 4%) one-time payment announced on 23 August 2016, Prime Minister Dmitry Medvedev. According to this decision, in January 2017 for all pensioners (working and not working) will be assessed a one-time 5 thousand.

“Better, when these [economic] conditions will be a one-time payment, when things to buy for the holiday, something else to do than to be smeared with a thin layer and do not feel in any way”, — explained the decision Medvedev at a meeting with pensioners.