One Million Russians Lost Jobs In Dec

Official unemployment data is due early next week.

The number of unemployed Russians rose to 6 million in December compared to 5 million in November as an economic downturn hit home, the head of the federal employment service Yuri Gertsiy said on Saturday.

Gertsiy said data calculated according to World Labour Organisation rules showed unemployment was much higher than the 1.5 million Russians who have officially registered as being out of work after six months of financial crisis.

"The data provided to us by (state statistical agency) Rosstat shows that a number of people who do not have a job or are searching is approximately 6 million people," Gertsiy told Ekho Moskvy radio station.

Russia, which had enjoyed an average economic growth of 7 percent in recent years, has seen its fortunes turn around with the collapse of world oil prices <URL-E>, the global credit crunch and the flight of investors from emerging markets.

Until August last year, the Russian economy was seen as "overheated" with its jobless rate at a record low of around 5 percent, or 4 million people, in July-August 2008. The number out of work has risen steadily since.

Russia's growth slowed to 6 percent in 2008 from 8.1 percent in 2007 and the economy is now expected to shrink by 0.2 percent next year, with the government launching a $200 billion bailout package to help stave off an extended recession.

The crisis has hit metals, construction, retail and banking sectors which had enjoyed double digit growth rates in recent years, forcing many companies lay off their staff after a series of boom years based on high world commodities prices.

The unemployment rate, however, is still below many other emerging countries, and analysts say the situation may begin to prompt political unrest only when the number out of work climbs past 10 million.

About 100 protesters were arrested in the Far Eastern city of Vladivostok last month during demonstrations against hikes in second hand car import duties aimed at protecting jobs in the domestic car industry.

Protests this month over the economy have turned violent in other eastern European states and Prime Minister Vladimir Putin's government is acutely aware of the threat of public unrest in Russia if the downturn worsens.

It has already raised unemployment benefits, set up a nationwide job search website and promised to use laid off workers in public works.