Salaries rose more than 7% in Russia last year as war boosts economy

• Real wages in Russia grew by 7.6% in the first 11 months of 2023, outpacing inflation.
• The wage increase was due to the labor shortage and the outflow of workers due to the war.
• Russia’s economy remains resilient thanks to wartime spending and government subsidies.

In Russia, wages have increased significantly due to wartime labor shortages, and wage increases are outpacing the inflation rate.

Russia’s Minister of Labor and Social Protection Anton Kochakov said that in the first 11 months of 2023, real wages in Russia (excluding inflation) increased by 7.6% year-on-year, state-run TASS news agency reported on Friday. Ta. Real wages have increased by 33.2% over six years, he added.

Russia’s official wage statistics are in line with a Bloomberg analysis published in January showing that wages in Russia’s private sector rose between 8% and 20% last year.

This significant increase was fueled by a brain drain in postwar Russia and a labor shortage due to men going off to war.

The wage figures were released nearly two years after Russia invaded Ukraine, triggering widespread Western sanctions against President Vladimir Putin’s government.

As the Ukraine war enters its third year, Russia’s economy appears resilient. Experts blame a combination of wartime spending and government subsidies.

Meanwhile, Russia’s economic growth is accelerating. inflation It reached nearly 12% in 2022 and 7.4% in 2023, but it may just be too hot.

In particular, the price of eggs soared more than 40% in the year to November, prompting President Vladimir Putin to issue an unusual apology as he seeks elections in March.

Elvira Nabiullina, Russia’s top central bank governor, warned in December that the country’s economy was at risk of overheating. She raised interest rates to 16% to cool the economy.

“Compare the economy to a car. If we try to drive faster than the car’s specifications allow, sooner or later the engine will overheat and we won’t be able to travel long distances. Perhaps we drive faster. I would, but for a short period of time,” Nabiullina explained at the time.