Russia: Unemployment declines but the economic situation looks mixed
|Since the 2008 crisis, unemployment rate is declining and the data that will be released today will approach 5%. The metric is expected to print lower at 5.1% versus 5.2% a month earlier.
The jobless rate is then declining but the proportion of unemployed person having higher education is growing. Yet, the ruble collapse in 2014 has created strong difficulties for companies to hire those skilled workers. On top of that it is clear that there are now more people with higher education than 10 years ago. As a result the proportion is naturally growing.
Stay on top of the markets with Swissquote’s News & Analysis
Meanwhile, real disposable income is falling for the 4th consecutive month (-0.4% in June). On the other hand, retail sales have grown 1.1% y/y in June after the positive increase of 0.1% y/y in May. However, that was at least three years that the annualized retail sales growth was negative. Inflation have increased by 4.4% y/y in June. It is the highest rate since February.
The Russia key rate has been lowered at 9%. The differential with inflation is still important and we should see the CBR tightening its monetary policy at a slow pace as growth remains weak. The last GDP data, the Q1 has shown a positive print, even though weak, at 0.5%.
We then believe that the ruble is set to appreciate but the appreciation should remain limited due to the CBR intervention. We target 56 before year-end.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.