Page 40 - Russia OUTLOOK 2024

Analysts expect higher growth in nominal wages to have taken place in 2023, at 13.0% (+0.7 pp), with growth slowing to 9.2% (+1.1 pp) in 2024, to 6.6% in 2025. The growth forecast for the end of the forecast horizon is +6.1%.
Calculations based on analysts’ forecasts of nominal wages and average CPI suggest that real wages will increase by 6.6% in 2023, by 1.8% in 2024, by 2.0% in 2025 and by 1.9% in 2026. Accordingly, by the end of the forecast horizon real wages will be 13.2% higher than in 2021, according to the CBR’s December macroeconomic survey
Real wages in Russia up 7% in 2023
Real wages in Russia were up 7%, and real disposable income increased by 4.4% in 2023, Russian President Vladimir Putin said at the VTB Investment Forum "Russia Calling!" on December 7.
But the wage growth in Russia showed signs of moderation in September 2023, the analysts surveyed by RBC business portal believe that overheating wage growth peaked, expecting paychecks to continue rising only in the sectors where acute labour shortages persist.
As covered by bne IntelliNews, Russia’s economy shows signs of overheating with unemployment at all-time low of 2.9% and labour shortages amid the full-scale military invasion of Ukraine pushing the salaries up.
However, real wages growth in September 2023 slowed down to 7.2% y/y versus 9.5% seen in August. Nominal wages increased by 13.6% versus 15.1% a month earlier.
The analysts believe that employers can simply no longer continue hiking salaries given the increased cost of money and rising interest rates, high logistics costs and the weak ruble. Increased demand for labour, and therefore high salary offers, persists in manufacturing, construction, the IT sector and logistics.
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