President Vladimir Putin is facing a serious demographic crisis which could plunge his country into economic chaos. Sanctions imposed from the West may soon be secondary reasons for the turmoil across the country as labour shortages and declining birth rates worsen.
“Today, according to our estimates, by 2030 we need to involve 10.9 million people in the economy,” government minister Anton Kotyakov told Putin on Tuesday, according to the Kremlin. He explained that the number would be to replace the 10.1million people who will soon reach retirement age. The Labour minister starkly warned that if productivity continues to fall, there could be “an additional shortage of personnel”.
The meeting among the president’s cabinet focused on the increasing concern over Russia’s demographics and healthcare, with the aim of boosting birth rates. This included cash payouts and tax breaks for large families.
Last year, birth rates in Russia fell to the lowest level since 1999 – standing at just 1.22 million. At the same time, deaths across the country increased by a steady 3.3%, according to the country’s official data.
According to a report from the Atlantic Council, the demographic crisis could result in the population – which stood at 146 million in 2024 – halving by the end of the century.
The war with Ukraine has also worsened labour shortages in Mr Putin’s country, due to an increased number of deaths and an exodus of young professionals.
The shortage of people able to work has also resulted in wages being driven up, which further fueled inflation.
Last month, Russia’s economy minister Maxim Reshetnikov warned of the country being “on the brink of recession” while at the St. Petersburg International Economic Forum – an event typically used to highlight Russia’s strength.
Russian business news outlet RBC quoted the official as saying “the numbers indicate cooling, but all our numbers are (like) a rearview mirror. Judging by the way businesses currently feel and the indicators, we are already, it seems to me, on the brink of going into a recession.”
