Skilled labor shortage and inflation – Nachrichten AG

The economic situation in Russia is becoming increasingly worrying. Recent analyses by the Russian Central Bank paint a bleak picture and warn of significant challenges that could soon affect the country's economy. These problematic developments could pose even greater difficulties for President Vladimir Putin. Skilled labor shortages, slowing economic growth and ongoing international sanctions are just some of the challenges facing the Russian economy.

Moscow is also facing an economic déjà vu, with the shortage of skilled workers being one of the main causes of the looming crisis. The military and armaments-related sectors are particularly affected, where the lack of skilled workers is described as alarming. To counteract this, Putin has taken measures to attract more people to military service by increasing wages. However, many other sectors, such as manufacturing, trade and agriculture, are drawing the same conclusion: there is a lack of personnel, which could significantly affect productivity.

Dynamics of economic challenges

The government is predicting a significant decline in growth in Russia's “overheated” economy, especially next year. Interest rates have been raised sharply to counteract stubborn inflation, which currently stands at 18 percent. Previously, the key interest rate had not been touched for several months and was only 16 percent. Experts predict that interest rates could remain above pre-war levels, which could put additional pressure on citizens' financial capabilities.

Russia's production capacity is almost exhausted, which could cause further problems, according to a report by the central bank. This utilization rate of almost 80 percent leaves little room for further growth. The deputy governor of the central bank, Alexei Zaboktin, expressed concern about the economy's capacity, saying that existing production resources are reaching their limits.

Global risks and their impact

A particularly worrying scenario was outlined by the Central Bank: in the worst case scenario, a global economic crisis could occur, which would seriously aggravate Russia's situation. Such an imbalance in financial markets could destabilize the world economy, affecting many other countries as well. Forecasts indicate that in such a case, demand for Russian products would fall, which could further weaken the economy.

In such a tense economic climate, inflation in Russia could rise to 15 percent. In the event of this global crisis, the Central Bank would be forced to raise interest rates significantly again, while at the same time, tougher sanctions would be expected. However, it is important to note that these scenarios are theoretical and by no means certain to occur.

Nevertheless, the central bank dares to look at the positive aspects: In some optimistic scenarios, it sees opportunities for an improved economic climate. Lower inflation, increased investment and a growing level of productivity could lead to an increase in gross domestic product. However, given the Kremlin's current economic policy and the existing problems, the chances of these positive developments seem rather limited, according to the independent online medium The Bell.