Page 56 - RusRPTFeb24

admitted that his employees are actively being poached by raw material companies and military-industrial complex enterprises.
By October 2023, the gap between labor market demand and supply had shrunk to 270,000 people—4.5 times less than in 2022 (averaging 1.2 million). Employers began to consider the main challenge as the rise in salaries. Economists believe that in 2024, it may even outpace not only GDP but also inflation by 1.3–1.6% on average across the country.
Unproductive salary growth is one of the signs of imbalances in the overheated Russian economy, increasingly leaning towards military priorities (more details here). The record-low unemployment rate of 2.9% indicates full employment, and double-digit nominal salary growth results in an inflationary spiral: people's earnings increase, they spend more, and prices continue to rise.
In the absence of reserves, any increase in demand will translate into rising prices, and salary growth will make non-commodity Russian exports more expensive than their counterparts. The advantage in the salary race evidently remains with state-owned companies in the raw materials sector and well-funded military-industrial complex enterprises. There is evidence that businesses are struggling to keep up with this race, caught in the "scissors" between stagnating efficiency and rising costs.
56 RUSSIA Country Report February 2024 www.intellinews.com