Russian unemployment may more than TRIPLE due to business shutdown amid coronavirus quarantine
The economic crisis triggered by Covid-19 can leave up to 8 million Russians out of work and the situation in the labor market may not improve till the end of the year, the head of Russia’s Accounts Chamber has warned.
“According to forecasts, during this crisis the number of unemployed people in Russia will rise from 2.5 million to 8 million for some time,” Alexei Kudrin, who used serve as Russia’s Minister of Finance, told RBC business outlet on Monday. He added that the jobless rate can drop only when the economy rebounds with the rise in demand and consumption and businesses coming back to normal.
Russia should look back at the measures the government took to tackle the 2008-2009 financial crisis to offset the aftermath of the current economic troubles, the official believes. Kudrin noted that during the previous crisis the country unveiled massive financial assistance to help businesses stay afloat. While it did not help to avoid layoffs, many companies, even the weak ones, survived.
Given the circumstances Russia may need to boost aid for businesses up to 3 trillion rubles (US$40.8 billion), according to Kudrin. Russian government said on Monday that it is considering additional measures to support the economy, which could be unveiled by the end of this week. Prime Minister Mikhail Mishustin said that companies working in sectors most affected by the coronavirus crisis can delay tax payments up to the end of 2021 in some cases.
Earlier Bloomberg reported that the Russian government may roll out about 1 trillion rubles ($13.6 billion) in new stimulus measures. Some funds could be spent to subsidize salaries of workers forced to stay at home due to quarantine measures.
Russia’s executive cabinet has so far reserved 1.4 trillion rubles (around $19 billion) to stimulate the economy amid the spread of the deadly virus and oil market volatility. Kudrin earlier warned that, although the support measures already amount to 5 percent of GDP, it may not be enough. According to him, the country needs at least seven percent.
As of Monday, over 18,000 people in Russia have tested positive for the virus and 148 people have died. The rapid spread of the disease has prompted the government to enforce mandatory self-isolation regimes in most regions, including in the capital. Earlier this month, President Vladimir Putin said that the nationwide paid leave would be extended to April 30, while non-essential businesses, including shopping malls, cinemas and gyms, remain shuttered in most parts of the country affected by the pandemic.
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