(Reuters) – Russian Prime Minister Mikhail Mishustin signed a decree cutting the state-backed mortgage rate and extending the programme, part of wider measures aimed at stimulating economic growth.

Russia is grappling with the fallout from Western sanctions over what Moscow calls a special military operation in Ukraine to demilitarise its neighbour and rid it of extreme anti-Russian nationalism.

The state-backed mortgage scheme that has helped support a construction boom in Russia had been due to expire on July 1. It will now run through the end of 2022 and the rate will be cut to 9% from 12%, the government said on Sunday.

The move will make houses more affordable for Russian families and support the construction industry, the government said in a statement.

The Russian economy is expected to shrink by 8-10% this year, according to forecasts from the central bank which on Friday cut its key interest rate to 14% in a sharper-than-expected move.

(Reporting by Reuters; editing by Guy Faulconbridge)