Russia to restrain unemployment in 2009: experts
Russia, Moscow, Jan. 24 / Trend , R.Agayev/
The rise in unemployment in Russia will end in 2009, financial experts told Trend . "The rise in unemployment will be handled by restricting the inflow of migrant workers," Renaissance Capital Chief Economist for Russia and the CIS Ekaterina Malofeeva told Trend . This week, Russian President Dimitry Medvedev said unemployment is growing in the country.
The unemployment rate is expected to increase in 2009, with a strong jump in the first quarter. National and regional authorities will ask companies to inhibit the process and refrain from laying off staff, Malofeeva said."In recent years, unemployment has been very low in Russia," she said. "There was a significant inflow of migrant workers in the construction, agricultural, financial, service and trade sectors." Malofeeva believes that state-owned enterprises will experience minimal employment reduction and construction and financial companies - maximum reduction. "There is no sign of massive layoffs, but perhaps it's just a matter of time," she said. Malofeeva said as a first step the "cheapest" staff will be dismissed from manufacturing enterprises. This will lead to serious social problems, she added, as these individuals have low incomes.
"I don't believe unemployment will be massive. It is unlikely to top 8 or 9 percent. I agree with the International Labor Organization (ILO) forecasts," she said. Alfa Bank Analyst Olga Naidenova also agrees with the ILO projections. She also does not expect a dramatic rise in unemployment.
Naidenova said the Russian labor market model will not allow a significant rise in unemployment. Russia has mobile incomes and wages and high bonuses, she said. Labor costs can be reduced without layoffs. The labor market is likely to respond to the crisis by lowering wages as opposed to laying off employees.
Even more so as these are the measures encouraged by the government, she said. Unicredit Bank said the unemployment rate will hit roughly 9 percent in 2009.Unicredit Bank Strategic Planning and Development Department head Vladimir Osakovski said the rise in unemployment this year will be linked to reduced production in industrial and non-industrial businesses, reduced consumer and investment demand and the global economic slowdown.
Have any feedback? Contact our journalist at: [email protected]