'Russia needs huge financial resources for military operations'

Tanks of pro-Russian troops drive along a street in the town of Popasna in the Luhansk region of Ukraine, May 26. Reuters-Yonhap

Russia needs huge financial resources for its military operations in Ukraine, Finance Minister Anton Siluanov said Friday, putting the amount of any budget stimulus for the economy at 8 trillion rubles ($120 billion).

Moscow sent tens of thousands of troops into Ukraine, Feb. 24, which prompted the West to impose sanctions that have already fanned inflation to nearly 18 percent and pushed the country to the brink of recession.

"Money, huge resources are needed for the special operation," Siluanov said in a lecture at a Moscow financial university.

President Vladimir Putin this week ordered 10 percent rises in pensions and the minimum wage to cushion Russians from inflation, but denied the economic problems were all linked to what Russia calls "a special military operation" in Ukraine.

The measures would cost the federal budget around 600 billion rubles this year and about 1 trillion rubles in 2023, Siluanov said earlier this week.

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In a TV interview aired late Friday, Siluanov said Russia will receive up to 1 trillion rubles in extra oil and gas revenue this year, funds which will be channeled to pay for increased social welfare payments.

Earlier on Friday, Siluanov also defended capital controls and asset freezes for foreign investors from "unfriendly" countries that Moscow imposed in response to Western sanctions.

"We will keep the investments that were made by foreigners from unfriendly countries in Russia in the same way as they will keep our gold and forex reserves," Siluanov said, referring to the Western move to freeze around $300 billion worth of Russia's international reserves it had accumulated over years.

Siluanov said restrictions on capital moves for foreign investors would remain in place until either sanctions are lifted or reserves are unfrozen. (Reuters)

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