In push for more Ukraine troops, city of Moscow hikes pay for contract soldiers to $60,000 a year

MOSCOW (Reuters) - Residents of Moscow who sign up to fight in Ukraine will receive a down payment of 1.9 million roubles ($21,777) from the city, taking their annual pay in their first service year to 5.2 million roubles ($59,600), the mayor's office said on Tuesday.

Total pay will include the downpayment, wages from the defence ministry, as well as regional and federal handouts, the office of Moscow Mayor Sergei Sobyanin said in a statement.

The new payments will enter into force immediately, it said.

The increase means that annual pay for Russian contract soldiers from Moscow will exceed Russia's average nominal wage more than five-fold, based on statistical data for the first quarter of 2024.

Generous payments for volunteers have helped Russia avoid a new nationwide mobilisation after a troubled campaign in 2022 led to a mass exodus of people to neighbouring countries.

However, some economists say the payments create risky imbalances.

They argue that high wages for soldiers serving in Ukraine have become a benchmark for the rest of the economy, leading to a wage growth spiral across sectors as workers demand increases to bring their wages more into line with what the army pays.

Russian officials say about 190,000 people have so far volunteered this year to fight in Ukraine, in what Moscow describes as a "special military operation". That, they say, compares with 490,000 contracts signed in 2023.

The City of Moscow, where much of Russia's educated workforce is concentrated, has been seen as lagging behind many other regions in the number of volunteers joining the army as a percentage of the total population.

There is no official data on the number of volunteers from Moscow but city officials put the total number of Muscovites fighting in Ukraine as of June 13 at 45,000.

($1 = 87.2000 roubles)

($1 = 87.2455 roubles)

(Reporting by Gleb Bryanski; Editing by Andrew Osborn and Gareth Jones)