In the next three years the conditions in the labor market in Russia will deteriorate: the number of workforce will decrease by 0.5–0.8% per year, while the number of pensioners during this time will increase by 2.7 million people. This is stated in the updated macroeconomic forecast of Vnesheconombank for the period up to 2020 (.pdf). By the end of the forecast period, the ratio of the number of pensioners and the employed in the economy will increase to 69% from the current 63%, if the existing pension system will be maintained.
Because of the demographic constraints, the working-age population will fall by 2020 to 3 million people (84 million to 81 million), predicts the Bank, and the number of pensioners will increase from 43 million to 45.7 million during the same period.
Against the background of recovery of economic growth this will lead to tougher competition on the labour market, written by the economists of the Bank, and it will contribute to the growth of wages. The average annual growth in real wages in 2017-2020 will amount to 2.8%, and this will allow by 2020 to reach the level of real wages in 2014. Pull your wage growth will be the corporate sector whereas in the public sector, employing 30% of all wage earners, growth in real terms will return only in 2018.
The decrease in average inflation to below 4% and the increase in wages will bolster consumer confidence: consumer demand will grow annually by 2.1–3.3% and the savings rate will be reduced from 13.7% in 2016 to 12.4% in 2020, according to the forecast.
The Bank’s baseline scenario expects GDP growth in 2017 will amount to 0.8%, but in subsequent years will accelerate to 1.7, 1.9 and 2.2 percent, respectively. The projected trajectory of GDP, virtually unchanged compared with the previous version of the forecast, published in August 2016. Economic growth of 2%, which provides economic development for the current year, in the current environment it is unlikely, say economists of the Bank. Target scenario of economic development focuses on increasing the growth rate to 3.1% by 2020, previously reported.
In contrast, the economic development Ministry, VEB does not expect the weakening of the ruble nominal exchange rate of the dollar, according to his version, will be stable at 57-58 to the end of 2020. However, in the previous forecast, the Bank laid the strengthening of the Russian currency to 52.8 RUB by 2020. But now it is assumed the smaller the strengthening of the ruble, because the Ministry of Finance buy foreign currency on additional oil and gas revenues.
VEB has conservative scenario: lower oil prices, lower export revenues, domestic demand is limited. In this case, the projected next wave of weakening of the ruble, RUB to 65-66 per dollar.