Data from Goskomstat for the first half of 1998 show Russian GDP down by 0.5 percent compared to the first half of 1997. Thus the recovery proclaimed by many Western observers in mid-1997 has failed to materialize. Industrial output was also static, rising by a borderline 0.1 percent.
Consumer inflation was running at the low level of 8.2 percent per annum, while producer prices actually fell by 0.9 percent in first half of year. Real incomes fell by nine percent, and retail spending by 1.8 percent. In June, the average wage was 1,110 rubles ($185). Thirty-two million people–22 percent of the population–were living below the poverty line.
New surveys by the International Labor Organization have led to revised unemployment figures. The total unemployed is now estimated at 8.3 million persons, 1.5 million higher than previously reported. This amounts to 11.5 percent of the labor force. Only 2.5 percent of the labor force bother to officially register as unemployed, since benefits are very low. (Kommersant-daily, July 21)
RUSSIAN FOREIGN MINISTER OFF TO BEIJING.