The explosion of public orders in the military-industrial complex is simultaneously fueling a cycle of rising wages, as Russia faces serious labor shortages.
Inflation in Russia continued to slow in September year-on-year, to a still high level of 8.63%, after a slight drop in August, the national statistics agency Rosstat said on Friday, against a backdrop of serious shortages of workforce.
In August, inflation was 9.05%, according to Rosstat, after reaching 9.13% the previous month, its highest level since February 2023, far above the official target of 4%. .
The rise in prices in Russia is mainly the result of soaring public spending aimed at supporting the military offensive in Ukraine.
However, the explosion of public orders in the military-industrial complex is simultaneously fueling a cycle of rising wages, because Russia is facing serious labor shortages, a direct consequence of leaving for the front or back. stranger to hundreds of thousands of men.
Rarely, Russian President Vladimir Putin publicly recognized this problem on Thursday.
“There are not enough workers in the country,” warned the master of the Kremlin, although he is usually quick to highlight the good figures for the Russian economy, a sign, according to him, that heavy Western sanctions targeting Russia have failed.
In recent months, the Russian president has congratulated himself almost every week on the “historically low” level of unemployment (2.4% in August, according to Rosstat), but without ever mentioning that this figure reflects another reality: Russia is short of workers. , even as it is considering toughening its migration policy, which before the conflict made it possible to balance the labor market.
Unemployment “practically no longer exists”, noted the Kremlin master, admitting that “it is one of the factors limiting economic growth”.
Faced with still high inflation, the Russian Central Bank (BCR) could once again raise its key rate, already at 19%, during its next meeting on the subject on November 25.
A decision which could once again provoke the anger of entrepreneurs, who increasingly have in their sights the boss of the BCR Elvira Nabioullina, accused of limiting activity by leading this policy of fierce fight against rising prices.
Another stone in the shoes of Russian officials, the price of the ruble crumbled again in September against the dollar and the euro, pushing the BCR to intervene massively in the foreign exchange markets.
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