The shrinking demand and other problems Russian businesses are struggling with will lead to a wave of layoffs; the number of unemployed may triple, head of the Russian Accounts Chamber Alexei Kudrin said, quoted by RBC.
The coronavirus pandemic may send the total number of unemployed in Russia up to 8 mio, and this situation may continue until the end of this year.
The head of the Accounts Chamber cited figures that are comparable with 1998 – 8.29 mio unemployed and the unemployment rate three times up, to 11.5%, said Pavel Sigal, First Vice President of Opora Russia SME association.
That situation is likely to repeat now, he said: layoffs began in mid-March – in tourism, air transportation, and non-food retail, which is a segment for small and medium-sized business. Large retail chains, even food retailers, began to cut their staff later as well.
Some of the largest companies have announced complete shutdown of their stores, including Sportmaster and 5 Karmanov. About 30% of employers are now thinking about closing their business. So these unemployment figures are realistic and explainable.
“At the same time, the share of shadow unemployment will also increase,” the expert added. “I mean situations where employees are forced to work part-time, which implies reduced compensations. The overall decrease in household incomes can reach 20–25%, which is also comparable to the 1998 default-time figures.”