MOSCOW (Reuters) - The extension of a preferential family mortgage programme, announced by President Vladimir Putin last week, will cost Russia's budget 1.5 trillion roubles ($16.5 billion) over the next six years, the finance ministry said on Monday.
The move is part of a larger spending package Putin proposed last week, ahead of an election he is almost certain to win.
Additional budget spending on the programme in 2024 will cost 260 billion roubles, the ministry said, citing preliminary calculations.
The ministry noted that the amount of spending would depend on the trajectory of interest rates in Russia. Analysts polled by Reuters expect the Bank of Russia, which has been grappling for months with stubbornly high inflation, to hold rates at 16% later in March.
"In conditions of significant price growth, our task is to support citizens who need to improve their living conditions," Finance Minister Anton Siluanov said in a statement.
Extending the programme is aimed at improving Russia's demographic situation, the ministry said. Concerns over low birth rates have plagued the Russian authorities for many years.
Earlier this month, Putin urged Russian families to produce at least two children for the sake of the nation's ethnic survival, and three or more for it to develop and thrive.
In 2023, about 90% of the volume of mortgage loans issued were at preferential rates, the ministry said. Siluanov said the aim was to reduce this to 20%-25%.
($1 = 91.1070 roubles)