MOSCOW (Reuters) - The number of unemployed in Russia will double over the next year to 10 million people, former premier Mikhail Kasyanov, now an opposition leader, told Ekho Moskvy radio.
Russia, which enjoyed annual growth of around 7 percent in the last five years, has seen a sharp turnaround in its fortunes due to falling oil prices, the global financial crisis and broad capital flight from emerging markets.
The last time Russia had 10 million unemployed was in early 1999, in the aftermath of the 1998 financial crisis.
Last month, 400,000 people lost their jobs according to official data, taking the number of unemployed to 5 million, its highest since March 2007.
“For unemployment, my forecast is that it will reach 10 million ... That is very bad, and that will happen already in April-March,” said Kasyanov, who served as prime minister during Vladimir Putin’s first presidential term and now leads a small opposition party, the Popular Democratic Union.
“Next year, there will be no gross domestic product (GDP) growth, industrial production is expected to fall ... Inflation will be high, no less than 14-15 percent, and under a normal scenario the rouble exchange rate would be 35 to the dollar,” added the liberal economist, who won his spurs as a senior finance ministry official and foreign debt negotiator.
Kasyanov heads his own liberal party, part of a small and fractured opposition hoping that the crisis will end the Kremlin’s political domination.
His outlook is gloomier than the Economy Ministry’s base line view, which sees the economy growing 2.4 percent next year -- still the slowest pace since the 1998 recession, and the rouble at around 30.8-31.8 to the dollar versus around 28 currently.
But with economic growth slowing to just 1.6 percent in November according to Interfax, less than a third of October’s pace, many economists are starting to forecast a recession.
Citigroup revised its Russian forecasts on Monday, predicting that the economy will contract in the first half of 2009 and eek out full-year growth of just 0.5 percent.
Public protests over the financial crisis have so far been sparse but there are some signs that the authorities are becoming slightly less popular. A poll by the Levada Center last week showed that disapproval of Putin and President Medvedev had reached a four-month high of 15 and 21 percent respectively.
Reporting by Toni Vorobyova; Editing by Ben Tan
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