Real disposable incomes in Russia will shrink by up to 12% this year, inflation will soar towards 20%, while unemployment will climb higher, economists at state development bank VEB said on Thursday, March 24.
A drop in real disposable incomes is a sensitive problem for Russia, especially with rising prices hitting living standards. For years, President Vladimir Putin has promised to raise real disposable incomes, a measure of people’s purchasing power.
Unemployment in Russia will reach 6% to 6.2% this year, the VEB research team said in a report, up from 4.4% seen in January.
“Implementation of extra support measures to support employment would allow to avoid a higher increase in the number of unemployed,” they said.
Russia’s economy was expected to contract in coming quarters amid a spike in inflation, the central bank said in March as it kept the key interest rate at 20% after an emergency rate hike that followed the beginning of what Russia calls “a special military operation” in Ukraine in late February.
Annual consumer inflation, which the central bank targets at 4%, will reach 19.3% by year-end, VEB said.
Economists polled by the central bank earlier in March expected the economy to contract by 8% and inflation to reach 20% in 2022. – Rappler.com