UPDATE3: PM: Russia to adjust pensions to CPI with one-time payment

(Adds comments by central bank in last paragraph)

GORKI, Moscow Region/MOSCOW, Aug 23 (PRIME) -- The Russian government will replace pension adjustment to the 2016 consumer price index (CPI) growth by a one-time 5,000 ruble payment in January 2017, Prime Minister Dmitry Medvedev said after a government meeting on Tuesday.

“We do not have enough resources now to carry out indexation in the second half of the year as usual but we have to index pensions. This is my position and the position of my colleagues in the government. This is why I think that it would be right to do indexation as a one-time payment,” the prime minister said.

“The amount has been set at 5,000 rubles and will be paid in January 2017. This decision will require more than 200 billion rubles.”

The income of the state Pension Fund fell short of 174 billion rubles in January–June, requiring injections from the federal budget, Medvedev said.

Medvedev also said that the 2017 pensions will be fully indexed to inflation of 2016. The next pension adjustment is slated for February and will require 270 billion rubles from the government.

The central bank believes the government’s decision to make a one-time payment to pensioners in January 2017 will not create additional risks for reaching the 4% inflation target in 2017.

(64.2078 rubles – U.S. $1)

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