The general dichotomy between real wages and the unemployment rate is likely to persist in Russia.
The real wages should continue to react in a proactive manner, while unemployment should remain virtually unchanged. Nominal wages growth has probably stalled at a low level just below the 3.0% yoy rate seen in March-April, implying that real wages will be hard hit, declining 12.8%yoy in May, estimates Societe generale.
Inclusion of the Crimea region does not distort the overall outlook for unemployment, nor do shifts in 'mainland' Russia's labour participation rate (68.6% at end Q1 15), with the latter related to one-off events unlikely to be repeated. Societe Generale forecasts, the labour participation rate is likely to remain above 69%, implying that unemployment will stay closer to 5.8%, which in seasonally adjusted terms also corresponds to 5.8%.
