Economy
Double-digit growth in real wages, retail sales as Russia’s unemployment hits record low
© Reuters. People rest on benches near a window of business premises put out for rent in Moscow, Russia June 8, 2022. REUTERS/Evgenia Novozhenina/File photo
(Reuters) – Record low unemployment in June highlighted Russia’s stark labour shortage, statistics data showed on Wednesday, even as the rebound from last year’s economic slump continued with double-digit jumps in wage growth and retail sales.
Russia was hit with a barrage of Western sanctions when it invaded Ukraine in February last year, ultimately leading to a 2.1% contraction in gross domestic product (GDP) in 2022, a better-than-expected decline touted by Moscow as evidence of its economic resilience.
Moscow regularly cites low unemployment and other recovering indicators as a sign that its economy is on the up, but the shortage of workers, exacerbated by last September’s partial mobilisation for the conflict in Ukraine, is set to bite over the long run.
“The age pyramid, mobilisation and those who have left (the country) mean that for five years we will be trying to grow with a shrinking workforce,” veteran economist Natalia Zubarevich, a professor at Moscow State University, told a financial congress last month.
The defence sector is getting all the attention, while other areas struggle, she said.
“The worst crisis among those employed is in the industrial sector and construction,” Zubaervich said. “That’s where the trouble is and it’s not dissipating.”
Unemployment dropped to 3.1% in June, a new record low, said the statistics service, Rosstat. Retail sales jumped 10% year on year in June, having fallen by almost as much the year before. Real wages, data for which are reported with a one-month lag, climbed 13.3% in May.
Real disposable incomes in the second quarter rose 5.3% year on year, Rosstat said, having remained flat in the same period of 2022.
The statistics service revised the first-quarter rise in real disposable incomes to 4.4% from 0.1% estimated in May, without providing a reason for the significant change. Incomes fell 1.0% in 2022 as a whole.
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
© Reuters. FILE PHOTO: Workers walk past an under-construction area with completed office towers in the background, in Shenzhen’s Qianhai new district, Guangdong province, China August 25, 2023. REUTERS/David Kirton/File Photo
SHANGHAI (Reuters) – China’s top planning body said on Saturday it had identified a second batch of public investment projects, including flood control and disaster relief programmes, under a bond issuance and investment plan announced in October to boost the economy.
With the latest tranche, China has now earmarked more than 800 billion yuan of its 1 trillion yuan ($140 billion) in additional government bond issuance in the fourth quarter, as it focuses on fiscal steps to shore up the flagging economy.
The National Development and Reform Commission (NDRC) said in a statement on Saturday it had identified 9,600 projects with planned investment of more than 560 billion yuan.
China’s economy, the world’s second largest, is struggling to regain its footing post-COVID-19 as policymakers grapple with tepid consumer demand, weak exports, falling foreign investment and a deepening real estate crisis.
The 1 trillion yuan in additional bond issuance will widen China’s 2023 budget deficit ratio to around 3.8 percent from 3 percent, the state-run Xinhua news agency has said.
“Construction of the projects will improve China’s flood control system, emergency response mechanism and disaster relief capabilities, and better protect people’s lives and property, so it is very significant,” the NDRC said.
The agency said it will coordinate with other government bodies to make sure that funds are allocated speedily for investment and that high standards of quality are maintained in project construction.
($1 = 7.1315 renminbi)
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
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