Hidden unemployment rising in Russia's civilian sector – intelligence

Ukraine's Foreign Intelligence Service (FIS) said this in a statement, Ukrinform reports.

"The Russian economy, now in deep systemic crisis, is being disguised by propaganda with 'positive' indicators. A key factor has been the sharp decline in purchasing power due to high interest rates," the agency said.

According to the intelligence service, the civilian sector is stagnating: companies are sending workers on unpaid leave or reducing them to part-time schedules, driving up hidden unemployment. Industries from coal and rail to the automotive sector are seeking government support.

The FIS said Russia's budget situation shows "a complete failure of financial planning."

In July alone, the federal budget deficit reached 1 trillion rubles, compared to the 1.2 trillion projected for the entire year. As a result, in just one-and-a-half months the deficit grew from the approved 3.8 trillion to nearly 5 trillion rubles.

"This dynamic not only undermines macroeconomic stability but also adds inflationary pressure, openly acknowledged even by the Central Bank," the agency said.

It noted that the economy is effectively split in two:

"The defense industry enjoys stable, generous funding and is shielded from high rates and costly loans thanks to state contracts and advances. Meanwhile, the civilian sector – the main source of budget revenue – is forced to cut production and staff, further weakening the domestic market. As a result, the country's resources are being reallocated to the war, while consumer goods production is in decline," the FIS said.

Photo: AA