Labour shortage set to hit Russia’s GDP

A dearth of young people joining Russia’s workforce because of a low birth rate will shave several percent off potential economic growth in the next five to six years, Economy Minister Maxim Oreshkin said.

In an interview at the Reuters Russian Investment summit, he said the labour shortage made it hard for technology companies, among others, to recruit staff they need — hurting a sector the government has identified as vital to reviving economic growth.

Russia’s birth rate hit a low in 1999 after living standards fell following the Soviet Union’s collapse. The impact is being felt now as people born at that time reach school-leaving age.

“In countries with a normal demographic pyramid, a new generation comes in with modern skills and takes up jobs in a modern economy and modern industries, and with their arrival the labour market changes in favour of new sectors,” he said. In Russia’s case, Oreshkin said, this was not happening.

UCJ, UNILORIN.