CBR announced a decline in the business climate index in July and deepening staff shortages

MOSCOW, July 24 (Reuters) – Russia’s Central Bank reported that the business climate index fell to 6.2 in July from 8.8 in June as staff shortages deepened in all key industries.

Against the backdrop of a weakening ruble and rising pro-inflationary risks, the CBR raised the main interest rate to 8.50% from 7.50% on Friday and allowed for further tightening of policy.

“Business price expectations have increased after falling in the previous two months, but so far they are below the 2021-2022 averages,” the Central Bank wrote in Monday’s review.

July data from the Central Bank of Russia’s enterprise survey showed a decline in current production estimates for both the economy as a whole and across all economic activities.

“Among the factors limiting production activity, enterprises most often pointed to staff shortages – both highly qualified specialists and low-skilled employees,” the Central Bank reported.

According to enterprises, in the second quarter of 2023 the problem of staff shortages deepened compared to the previous quarter, both in the entire economy and in all major industries.

The number of employees in the second quarter reached a local minimum since the first quarter of 2020. In agriculture, services, industrial processing and trade in motor vehicles, staff shortages deepened more than in autumn 2022.

In the third quarter, companies from the main sectors of the economy plan to increase employment, the central bank said. (Elena’s Factory)