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An Aging Workforce Dims Russia’s Economic Forecast

undefined and Senior Global Analyst
Sim Tack
Senior Global Analyst , Stratfor

Jan 23, 2020 | 10:00 GMT

A crowd of people walks down the street in Moscow in September 2017.

People walk down a busy street in Moscow. Russia's aging workforce will greatly suppress the country's economic growth over the next decade.

(Shutterstock/Anton Gvozdikov)

Highlights

  • By 2036, the number of young adults living in Russia is expected to rapidly decline just as the largest segment of its population approaches retirement.
  • Moscow's move to extend retirement ages will sustain the size of Russia's labor market in the short term, though it ultimately will make its workforce older, less efficient and less productive.
  • In the long term, Russia's aging labor force will severely restrict its potential for economic growth, which could compel Russia to seek out new economic relations, as well as exercise more constraint toward the West.

Russia's population has long been projected to shrink in the coming decades due to high emigration and low birth rates. But recent projections forecast an even faster reduction than previously anticipated, raising new concerns over the severity of the country's demographic decline and the potential impact on the Russian economy. For now, extended retirement ages and an upcoming boom of young workers will help Moscow temporarily manage the effects of its demographic decline -- though that won't keep Russia from hemorrhaging the high-quality workers needed to keep its economy chugging in the meantime....

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