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Low unemployment in Russia stem from poor labor productivity, Central Bank head says

October 02, 22:03 UTC+3 ANOSINO
According to Nabiullina, when a country has free capacities and free labor force, reduction of credit rates will entail production growth rather than inflation hike
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ANOSINO /Moscow region/, October 2. /TASS/. Low unemployment rates in Russia do not speak about the efficiency of its economy, on the contrary, they stem from poor labor productivity when more people are needed to manufacture one unit of output, head of the Russian Central Bank Elvira Nabiullina said on Sunday.

"We have a production slump but rather low unemployment. There are not many efficient free capacities. Unemployment is low because labor productivity is low. We have a vast potential to boost labor productivity," she said.

According to Nabiullina, when a country has free capacities and free labor force, reduction of credit rates will entail production growth rather than inflation hikes.

"Potential growth is a growth the country can ensure by loading the existing labor force and loading existing free capacities," she said, adding that potential growth of the Russian economy is estimated at about 1-1.5%, "maybe about two percent but not more."

"Naturally, these growth rates are very low to improve the living standards of people and to ensure a worthy place of our economy in the global one. We need higher growth rates and it means structural changes," she stressed.

According to official statistics, the number of the unemployed in Russia as of August 2016 was four million people, or 5.2% of the employable population. For reference, in 2015 unemployment in the United States stood at 5.3%, in France - at 10.4%, and in Canada - 6.9%

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