UPDATE: Econ ministry sees real wages in Russia rising 4% in 2018

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MOSCOW, Dec 20 (PRIME) -- The Economic Development Ministry expects real wages in Russia to grow about 4% in 2018, Minister Maxim Oreshkin said on Wednesday at a meeting with representatives of the Association of European Businesses.

The economy and consumer demand are recovering in Russia, he said. “We see that the labor market is in a good condition. Unemployment is at the lowest level in its history, which supports restoration of real wages of citizens. The latest data shows growth of about 4–5% this year. We expect that real wages will grow about 4% in 2018,” he said.

In late October, the ministry registered high volatility of growth dynamics of wages and expected an increase of real wages to speed up. The central bank said then that Russia’s inflation may exceed 4% in the mid-term if growth of wages exceeds a productivity increase.

Oreshkin also said that interest rates on mortgage loans in Russia have contracted below 10% for the first time in the country’s history.

“The actual data shows that interest rates on mortgage loans have fallen below 10% for the first time in the Russian history. This contraction of mortgage rates provides positive prospects for growth of the sector on the background of a low debt burden of citizens and of the economy in general,” he said.

“The construction sector has started its restoration. Those sectors that suffered the most, they depend on the economic cycle. As we see, demand for housing is growing, the mortgage market is going through a revival. This is one of the examples of how a switch to low inflation supports economic growth,” he said.

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