Russia is staring down a long-term economic threat that could outlast both the war in Ukraine and Western sanctions: a deepening demographic crisis.
On Tuesday, Labor Minister Anton Kotyakov underscored the scale of the problem during a meeting with President Vladimir Putin.
“Today, according to our estimates, by 2030 we need to involve 10.9 million people in the economy,” Kotyakov told Putin, according to a post from the Kremlin.
Kotyakov said the number is required to replace 10.1 million people who will reach retirement age, and 800,000 new jobs.
Kotyakov warned that if productivity growth falls short of the assumptions built into the current forecast, there could be “an additional shortage of personnel.”
The remarks came during a Kremlin meeting focused on demographics and healthcare. Members of Putin’s cabinet discussed efforts to boost birth rates, including financial incentives like cash payouts and tax breaks for large families.
Putin has made population growth a national priority, calling it a matter of “ethnic survival” and encouraging women to have as many as eight children.
In 2024, births in Russia fell to 1.22 million — the lowest level since 1999 — while deaths increased by 3.3% to 1.82 million, according to official data. The country’s population was about 146 million last year.
But boosting birth rates isn’t Russia’s only challenge. The war in Ukraine has exacerbated labor shortages, with battlefield injuries and deaths cutting into the working-age population and a brain drain pulling younger, educated professionals out of the country.
The demographic outlook is so bleak that the country’s population could halve by the end of this century, per a report from the Atlantic Council, a think tank, in August.
Businesses are already feeling the heat. Employers are increasingly turning to retirees and even teenagers to fill roles.
The labor shortage has driven up wages and fueled inflation, adding strain to an economy already distorted by wartime spending.
By the end of 2023, Russia’s economy was running so hot that the central bank warned of overheating.
The momentum may be fading.
Just last month, Russia’s economy minister, Maxim Reshetnikov, warned that the country was “on the brink” of a recession.
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