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2.4 Unemployment
“The main structural limitation on Russia’s economy is a labour shortage. Russia had demographic problems before the full-scale invasion of Ukraine in 2022, but since then, they have only [got] worse. Part of the potential workforce has gone to the front; hundreds of thousands of men have been killed and injured; the defence sector is hungry for workers; and almost a million people [have] left the country because of their opposition to the war. Unemployment is currently 2.3%, a statistic that officials like to trumpet, but which actually shows that there is nobody left to work. Even Kremlin-linked experts estimate Russia needs an additional 1.6mn workers. To attract staff, businesses are increasing salaries, which are rising faster than inflation and outstripping labour productivity," says Prokopenko.
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