Russia mobilizes 300,000 reservists with 45 trillion won monthly pay... Worsening fiscal strain and manpower shortage

Increasing Number of Soldiers Protesting Over Unpaid Wages
Russian Central Bank Chief: "Labor Shortage Worsens Inflation"

[Image source=Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] The Russian government is reportedly facing significant difficulties in covering the maintenance costs of the 300,000-strong reserve forces recently conscripted through the partial mobilization order. It is known that a huge budget exceeding 45 trillion Korean won is required just for their monthly salaries and allowances, intensifying the financial crisis amid worsening economic hardships caused by sanctions against Russia. Additionally, as the number of young people fleeing abroad to avoid conscription increases, concerns are rising that labor shortages in the industrial sector are exacerbating inflation.

According to major foreign media including AFP on the 2nd (local time), the total amount for six months’ salaries and allowances for the 300,000 reservists conscripted under the partial mobilization order is estimated to be between 900 billion rubles and 3 trillion rubles (approximately 20 trillion to 45 trillion Korean won). With promises to pay the conscripted soldiers two to three times the average wage of Russian workers, the large-scale conscription of 300,000 troops is reportedly deepening the financial difficulties.

Cases of soldiers protesting for not receiving their promised salaries are also increasing. According to CNN, a video showing conscripts from the Chuvashia region east of Moscow protesting that the promised monthly salary of 300,000 rubles was not paid before enlistment recently went viral on Russian Telegram channels.

[Image source=Yonhap News]

Along with the personnel drafted through the partial mobilization order, the rapid increase in young people fleeing abroad to avoid conscription is raising concerns about worsening inflation due to labor shortages in the industrial sector. According to AP News, on the 28th of last month, Elvira Nabiullina, Governor of the Central Bank of Russia, stated in a press release, "The partial mobilization order is causing profound changes in inflation, and especially the structural changes in the labor market and labor shortages are feared to worsen inflation in the long term."

According to The Washington Post (WP), about 300,000 young men who became subject to conscription after Russia’s partial mobilization declaration have fled to neighboring countries to avoid conscription. Although the immediate effect may appear as an improvement in inflation due to a slowdown in their consumption demand, it is forecasted that inflation will worsen as labor shortages in key industries deepen.

The Central Bank of Russia stated, "Public sector demand will support economic activity, but the gross domestic product (GDP) growth rate is expected to record a contraction of 1.0 to 4.0% until the third quarter of next year, followed by a gradual recovery from the fourth quarter." It also warned, "In a global economic downturn environment, there is a risk that Ural oil prices will fall from $70 per barrel next year to $55 per barrel by 2025."

This content was produced with the assistance of AI translation services.