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Data shows no recovery yet
By Toni Vorobyova |
May 23, 2009, Saturday
|
Print Edition
Print Edition
RUSSIAN data yesterday showed that it is too soon to call the bottom on the country's first recession in a decade, with unemployment rising to a 9-year high and retail sales slumping for a third month in a row.
News that 200,000 lost their jobs last month, pushing up unemployment to 7.7 million, or 10.2 percent of the population, comes hot on the heels of a record slump in industrial output.
Unemployment data for previous months were also revised higher, adding some 400,000 jobless to the originally reported January figure and a whopping 700,000 to February.
Without those adjustments, the figures would have shown some 1.3 million Russians lost jobs in the past two months.
Analysts say unemployment represents the main challenge for Russian authorities but so far public unrest has been limited and ratings for President Dmitry Medvedev and Prime Minister Vladimir Putin are still running high.
Russia's economy has fallen prey to lower oil prices at a time when the global slowdown reduces demand for its commodities and the worldwide credit crunch leaves companies struggling to refinance foreign loans.
That has filtered through into the domestic economy, with some 3.2 million losing their jobs since August, and many more forced to cope with lower salaries and shortened working weeks.
Politicians had hoped the worst of the slowdown came in the first quarter of this year.
But the latest data adds credibility to the Economy Ministry forecast the recession could last for up to two years.
"What we had expected for the end of the year has already been surpassed and it looks like unemployment could reach 12 percent," said Tatiana Orlova, an economist at ING.
This week alone, Russia's largest car maker, AvtoVAZ, said it would slash working hours next month while smaller rival IzhAvto plans to shed 2,500 jobs, or half its workforce, from August.
News that 200,000 lost their jobs last month, pushing up unemployment to 7.7 million, or 10.2 percent of the population, comes hot on the heels of a record slump in industrial output.
Unemployment data for previous months were also revised higher, adding some 400,000 jobless to the originally reported January figure and a whopping 700,000 to February.
Without those adjustments, the figures would have shown some 1.3 million Russians lost jobs in the past two months.
Analysts say unemployment represents the main challenge for Russian authorities but so far public unrest has been limited and ratings for President Dmitry Medvedev and Prime Minister Vladimir Putin are still running high.
Russia's economy has fallen prey to lower oil prices at a time when the global slowdown reduces demand for its commodities and the worldwide credit crunch leaves companies struggling to refinance foreign loans.
That has filtered through into the domestic economy, with some 3.2 million losing their jobs since August, and many more forced to cope with lower salaries and shortened working weeks.
Politicians had hoped the worst of the slowdown came in the first quarter of this year.
But the latest data adds credibility to the Economy Ministry forecast the recession could last for up to two years.
"What we had expected for the end of the year has already been surpassed and it looks like unemployment could reach 12 percent," said Tatiana Orlova, an economist at ING.
This week alone, Russia's largest car maker, AvtoVAZ, said it would slash working hours next month while smaller rival IzhAvto plans to shed 2,500 jobs, or half its workforce, from August.
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