The number of people out of work in Russia fell by nearly 400,000 last month, but the economy contracted as investment continued to fall and growth in retail sales and disposable incomes was very slow, data showed Friday.
The data further cements expectations for another interest rate cut from the Central Bank this month as it seeks to spur lending to help Russia recover from its first recession in a decade.
Seasonally adjusted gross domestic product fell 0.9 percent in February, erasing most of January's gains, Economic Development Minister Elvira Nabiullina told reporters.
"It shows that the factors that were supposed to stimulate the economy are not fully working yet," she said, adding that the data confirmed the unstable nature of Russia's recovery.
On the bright side was a 2.9 percent year-on-year rise in real wages — their best performance in 15 months, the State Statistics Service said. Unemployment also eased to 8.6 percent from January's 10-month peak of 9.2 percent.
The median estimate of 12 economists in a Bloomberg survey was for a gain to 9.3 percent.
But some 200,000 Russians were still owed wages on March 1, according to the statistics service. Wage arrears totaled 4.12 billion rubles ($139.9 million) in February, unchanged from the month before.
The manufacturing industry accounted for the highest level of wage arrears, or 2.088 billion rubles of the total, the service said.
Pension increases, rising wages and increased confidence helped consumer spending recover this year. Thirty-nine million people, or 27 percent of Russia's population, receive a pension, and the government approved increases of 46 percent this year, according to VTB Capital.
(Reuters, Bloomberg)
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