Why has labor productivity declined in Russia?

Labor productivity in the Russian economy over the past year decreased by 3.6% compared to 2021, according to Rosstat data. This is the deepest drop in the indicator since the global financial crisis – in 2009 it was -4.1%. In 2021, labor productivity increased by 3.7%, and in the pandemic year of 2020 it decreased by 0.4%. Before this, the figure grew at a rate of about 3% per year, the last drop was recorded in 2015 (by 1.3%) – the next year after the introduction of sanctions due to the annexation of Crimea.

The indicator is calculated based on data on labor costs for the production of goods and services – they, in turn, are based on information on the distribution of labor resources and the time that employees spend on work.