Page 37 - RusRPTJun19

4.5 Labour and income
4.5.1 Labour market, unemployment dynamics
The unemployment rate in April remained unchanged from March at a low of 4.7%.
Population aging remains the main challenge for budget spending through to 2036 when the demographic dip from the 90s catastrophe passes out of the working population, the Finance Ministry warned in a budget forecast on April 1. Over the next 17 years the number of women under the age of 55 and men under 60 will decrease by 2.7mn people, with most of fall arriving in the next five years, the Ministry of Finance predicts. The number of older people, by contrast, will grow by more than 5mn. The demographic problems are urgent the ministry warned. Despite this years introduction of higher retirement ages to 65 for men and 63 for women the budget will remain under severe pressure. The Ministry of Economic Development expects that the number of employed people will grow by 1.8mn people by 2024 and by a maximum of 1.5mn people by 2035, which is not enough to replace the number of people leaving the workforce due to demographics.
Conditions in the Russian labour market have tightened in recent months. The Capital Economics’ seasonally adjusted measure of the unemployment rate fell to a fresh post-communist low in March. Moreover, the job vacancy rate is now at its highest level since early-2014, suggesting that firms are finding it increasingly difficult to hire workers. And the employment component of the composite PMI climbed to an eight-year high in February. On past form, this is consistent with a pick-up in wage growth.
“This supports our view that the economy should expand at a fairly decent pace over the remainder of this year. We think that GDP will grow by 2.0% in
37 RUSSIA Country Report June 2019 www.intellinews.com