About 300,000 Russians lost their jobs in January as collapsing oil prices and months of market crisis hammered the real economy, bringing unemployment close to rates not seen since the socially unstable 1990s.
The number of jobless jumped to 6.1 million or 8.1 percent of the workforce versus 7.7 percent in December, when half a million Russians were laid off, data from the Federal Statistics Service showed.
Falling oil prices and rising social spending are seen upping the budget deficit to 8 percent this year.
A report on Thursday said government efforts to bolster the economy, and subdue the potential for political unrest, would amount to some 1.9 trillion roubles ($53.33 billion).
January capital investment plunged over 15 percent year on year, much worse than a 5 percent decline predicted by analysts, and average wages adjusted for inflation fell 9.1 percent compared to a 5.1 percent fall forecast by analysts.
The unemployment figure is likely to grow quickly, with government officials warning April will be one of the toughest months in terms of job losses.
The Russian rouble received support from upcoming corporate tax payments as banks started selling foreign currency to enable their clients to transfer roubles to the State Treasury.
The rouble strengthened by over one percent to 40 against the basket, made of 0.55 dollars and 0.45 euros, while Russia's gold and forex reserves rose by $3.1 billion to $386.5 billion in the latest week.
Officials now forecast the economy to contract by 2.2 percent in 2009, as falling oil and commodity prices lead a retreat from a decade of impressive growth.
Russia enjoyed its lowest jobless rates in 2007, with only 4.2 million of its 76 million workforce out of work, compared to highs of 9.2 million in 1999, during the aftermath of the 1998 financial crisis.
The Vedomosti business daily reported on Thursday that the latest draft budget earmarks more than a quarter of its spending for anti-crisis measures — a sum that amounts to around 1.9 trillion roubles.
To make room for these expenditures, 21 percent of the plans set out in the previous budget would be cut in an effort to ensure that the deficit does not exceed 8 percent, it said.
The new budget, based on an oil price of $41 per barrel, is 558.6 billion roubles larger than the previous one.
The government hopes anti-crisis spending will revitalise the once booming economy.
"No crisis should impede our movement forward. Yes, we had to postpone some programmes, or to halve financing but our priorities should stay the same," President Dmitry Medvedev said at a meeting in Siberia.
"Otherwise, it will look like we had wasted the last eight years," Medvedev added.
Statistics Service data showed January completions of housing units in Russiafell 4 percent year on year to 3.1 million square metres.
In December, when housing completions are traditionally high, year on year growth stood at 3 percent, while in December 2008 it was up by 8.2 percent.
Growth in retail sales, which have been a vital part of Russia's economic boom, slowed in January to 2.4 percent year on year from a rise of 4.8 percent in December and a 16.3 percent increase in January 2008.
