Page 59 - RusRPTSept23

the second quarter compared to the same period last year. These wage hikes, the most significant in 15 years, are propelling domestic demand beyond the country's production capacity. This surge in demand, coupled with a dependency on imports, adds to inflationary pressures and leads to a weaker ruble, as highlighted by the Central Bank. The shift towards a "war economy" is intensifying these challenges, contributing to the multifaceted economic landscape Russia is navigating.
Throughout the first half of the year, most industries demonstrated a high or critical level of personnel shortage. At the same time, the situation worsened in the second quarter: in May-June, only one or two industries could boast that they did not fall into the zone of a high shortage of qualified personnel.
In June, only woodworking showed neutral vulnerability, follows from the study. In 15 out of 29 extractive and manufacturing industries, a critical or high level of personnel vulnerability was observed in the first month of summer. The auto industry, manufacturers of electrical equipment and electronics are at the level of deep personnel vulnerability throughout 2023, experts state.
In July, the level of personnel shortage in industry set a new record, an earlier survey by the Gaidar Institute showed. A shortage of personnel was observed in 42% of industrial enterprises. In April, only a third of companies complained about it. The problem of a shortage of personnel was acute back in January 2022 against the background of the post-COVID economic recovery and intensified due to the war (import substitution, state defense orders, mobilization and emigration).According to Rosstat, unemployment in June for the fifth time since the beginning of the year updated a historical low. Why this is bad in the current situation, and wage growth is not a blessing, but a symptom, we explained here. At the same time, against the backdrop of a shortage of personnel, the Central Bank and the Gaidar Institute in the second quarter recorded a historical record for the utilization of production capacities.
There's a strong domestic political cycle in Russia's economic policy. Its best illustration are regular real wage spikes around presidential campaigns - public wage got a boost around all recent campaigns, and will spike again in the run up to March 2024
RUSSIA Country Report September 2023 www.intellinews.com