(Bloomberg) -- The price tag for the promises Vladimir Putin has made ahead of Russian presidential elections later this month will total tens of billions of dollars over the next six years. 

New national projects that Putin proposed in an annual address Thursday to the Federal Assembly, along with initiatives on improving living standards and massive write-offs of loans to Russian regions, could cost the Kremlin’s coffers more than $130 billion that’s not currently accounted for in the budget, analysts estimate. 

Putin’s proposals include expanding state support to increase the birth rate and life expectancy, as well as investment to improve infrastructure, boost development of technology and increase non-oil exports. Several other ideas are aimed at developing human resources as Russia continues to face an acute labor shortage, exacerbated by its war in Ukraine. 

Rosbank PJSC estimates the “new” budget spending needed to bring Putin’s plans to life totals around 5.7 trillion rubles ($62.5 billion). Taking into account budget spending already allocated for 2024-2026, and the additional cost of Putin’s initiatives, total spending could reach 15 trillion rubles over his next presidential term, Rosbank wrote in a note. 

An analysis by Dmitry Polevoy, investment director at Astra Asset Management, shows such projects could cost Russia as much as 2 trillion rubles per year, or more than $130 billion over six years. That takes into account not only government spending but also a proposed write-off of two-thirds of the loans provided from the federal budget to Russia’s regions as well as investment in utilities.

“At first glance, it doesn’t look unaffordable, although if the economic situation is worse than officials forecast, that will require a search for additional sources of financing,” he said. 

Russia’s budget is already under pressure from elevated military spending driven by the war, which will exceed traditionally high outlays on social support this year. At the same time, strict and expanding sanctions weigh on the Kremlin’s proceeds from key commodity exports. 

In 2023, Russia posted a fiscal gap for the second year in a row, and expects this year’s shortfall to come in at 1.6 trillion rubles. 

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To cope with the extra spending, Putin has suggested the government consider a new, progressive tax to more fairly distribute the burden from the levy. 

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