Russia’s Vladimir Putin to deliver state of the nation on Wednesday

Russian President Vladimir Putin will deliver his annual state of the nation address to the lower house today.

The Russian economy grew 2.3% in 2018—its highest rate since 2012, though the numbers have been questioned. Despite this, Mr Putin faces growing economic problems; real incomes dropped by 0.2% due to slower wage growth and higher consumer spending. Coupled with his unpopular pension reforms, this has seen trust in the Russian president fall to 33.4%, its lowest level since 2006.

Mr Putin could opt to focus on foreign policy—something that has worked for him in the past when facing low trust numbers. He will likely present different faces on this front, being confrontational towards the US suspension of the INF treaty, while projecting diplomatic attitudes on issues like Syria and a potential integration with Belarus.

Given that domestic issues are central in Putin’s declining trust numbers, and that Putin has deemed his pension reform vital to the Russian economy, expect him to instead focus on policies for increasing wages, while curbing consumer lending. One such measure could be removing the value-added tax on gold, which could boost investment thanks to increasing demand for precious metals in Russia.