Estonia’s Central Bank: Russia’s Economy Is Under Growing Strain
A severe labor shortage has become a major constraint on Russia’s economy, according to Peeter Luikmel, an economist at the Bank of Estonia. He notes that mobilization and the outflow of young people abroad have placed significant strain on Russia’s civilian sector, and even rising wages have not been enough to fill vacant positions.
CONTENT
Effects of Mobilization
Assessment of Russian Economy
Iran War and Russia
U.S. Easing Sanctions on Russian Oil
Russian Economy and Ordinary Citizens
Effects of Mobilization
Productive hands are certainly becoming fighting hands, but not only that. A large number of people of working age have chosen to leave Russia, whether for studies or other reasons. Mobilization exerts significant psychological pressure on young people of conscription age. It is evident that many students abroad are extending their studies for various reasons. This segment of the working-age population remains under constant psychological pressure from mobilization, which further restrains the economy.
The service sector, where young people are often employed in low-paid jobs, is experiencing the most acute shortages. There are even reports, at times, of minors serving drinks in restaurants.
This clearly indicates that the low-wage sector in Russia is the most difficult for employers to staff, which is why wage growth there is reaching double-digit levels.
Assessment of Russian Economy
It should be acknowledged that waging the war is also costly for Russia. The sacrifices made domestically can be summarized across several dimensions. First and foremost, there is a shortage of labor.
