Putin says Russia beat ‘economic blitzkrieg,’ warns of hardship

President Vladimir Putin said Russia survived an “economic blitzkrieg” of international sanctions over its war on Ukraine, as he warned the country faces rising joblessness and inflation as it adjusts.

“The new realities will require deep structural changes in our economy. And, I won’t hide it, they won’t be easy,” Putin told the government in a videoconference Wednesday. “They will lead to a temporary increase in inflation and unemployment.”

He ordered officials to increase social benefits including pensions and to boost wages of state employees, acknowledging that “rising prices seriously affect people’s income.” The government has sufficient funds to meet the costs without resorting to printing money, he said, without elaborating.

Putin ordered support to Russia’s economy amid sweeping sanctions that prompted the central bank to more than double the key interest rate to 20% to try to arrest a collapse of the ruble. Russia’s also facing an exodus of foreign companies and investment in response to the president’s Feb. 24 order to invade Ukraine.

The government’s “most important task” is to ensure adequate supplies of consumer goods, particularly essential medicines, to curb a surge in prices, Putin said. Consumer spending rose by 1 trillion rubles ($9.7 billion) after the invasion as Russians rushed to stock up on goods, he said.

He ruled out “manual” regulation of prices, saying officials should boost supplies including by redirecting goods intended for export to the domestic market.