Russia's labor market currently experiencing shortage, constraining economy, govt 'very worried' - Reshetnikov

MOSCOW. Dec 6 (Interfax) - The Russian economy has adapted to Western sanctions more quickly than expected, and Russia's GDP should contract 2.9% in 2022, which is lower than the initial forecasts; however, the situation on the labor market is "very worrying", Economic Development Minister Maxim Reshetnikov said during an interview with the Rossiya 24 TV channel.

"We are of course very much concerned about the labor market, because, in fact, it is in short supply at the moment, and this is constraining [the economy]," Reshetnikov said when commenting on the problems facing the economy.

"The economy is adapting [to sanctions], and adapting faster than expected, because business is doing its job; and even those restrictions on payment systems, and so on, no matter how sensitive, business nevertheless finds opportunities and adapts in its business practices. We do not expect anything too supernatural here, so that colleagues do not accept [the effect of new sanctions from the West]," Reshetnikov said when commenting on the matter of the effect of Western sanctions on the economy.

"All processes have been launched, all decisions have been developed, and everything has been included in the budget, which is currently adopted. We analyze everything of course, and look at everything, though, for the most part, the focus is now on, it seems to me, the whole government is not waiting [for] who else will take what else, but on implementing solutions for the tasks that have already been developed, discussed and received support from the president; budgeted, and now we need to do all this," Reshetnikov said.

Reshetnikov has also confirmed the forecast for Russia's GDP to contract 2.9% in 2022. "However, the question is not even in sorting through these figures; we must move proactively, we must implement the tasks that have been discussed with the president on investment policy," the minister stressed.

Reshetnikov also noted that in addition to the labor market, "we are concerned about the topic of product imports," primarily intermediate imports that affect production in the country.

"Therefore, we need to resolve all the issues related to the Far East as quickly as possible, from traffic logjams at border crossings, to issues on expanding transport corridors, and so on. Of course, foreign economic activity is also one of the priorities here, precisely in terms of redirecting our exports and finding new ways for imports," Reshetnikov said during an interview following his visit to Myanmar, where he participated in an intergovernmental commission on trade and economic cooperation.

According to data of the Russian Federal State Statistics Service (Rosstat), Russia's unemployment rate remained at 3.9% in October 2022, as it was in September, after reaching an all-time low of 3.8% in August since monitoring began in 1991. There was previously unemployment of 3.9% from May to July, 4% in April, 4.1% in March and February, and 4.4% in January.