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. Last Updated: 07/27/2016

Jobless Rate Climbs To 10%

The unemployment rate hit 10 percent last month and will continue to grow, but at a much slower pace, for the rest of the year, the Economic Development Ministry said Monday.

The number of unemployed Russians was 7.5 million last month, the Economic Development Ministry said, bringing the total close to the ministry's worst-case scenario figure of 7.8 million.

The latest number indicates that 3.5 million people have been laid off since August, the month before the economy -- heavily dependent on oil and gas exports -- began spinning into a crisis with the rest of the world. The figure is also high above the ministry's initial forecast that 6 million people would be jobless by the end of the year, which complicates the government's task of avoiding potential social unrest.

On the brighter side, Prime Minister Vladimir Putin said the growth of the unemployment rate slowed down to 1.6 percent every week last month from 9 percent every week in February and January.

"The situation is improving, albeit very slowly," he said at a Cabinet meeting Monday.

Health and Social Development Minister Tatyana Golikova said the government was counting on the trend to hold.

"We don't expect any sharp surges in general unemployment in the near future," she said after the Cabinet meeting.

People who lost their jobs are expected to find new ones through government job stimulus programs, including one under which unemployed people can collect 60,000 rubles ($1,800) to start small businesses, Golikova said.

Some 2.3 million people had registered as unemployed with the authorities as of April 22, she said.

The number of jobless people may swell further if companies lay off some of the 1.2 million employees who are now on forced leave or are working shortened weeks, the Economic Development Ministry said.

A third of all Russian companies intend to continue cutting staff, with most of them being in the metallurgy and car-making sectors, the ministry said.

Carmaker GAZ fired 7,500 people in the first quarter of this year as car sales dropped by 40 percent countrywide. Severstal, the country's largest steel producer, said last month that it was planning to sever 9,500 jobs.

The largest recent cut, however, comes from state-owned Russian Railways, which announced this month that it would lay off 54,000 workers.

The government has allocated 77 billion rubles ($2.3 billion) for various programs to create more than 1 million temporary jobs and raise unemployment payments. The money would also pay for retraining some 220,000 people.

One of the measures is to give people registered as unemployed a payment of 10,800 rubles to 58,800 rubles -- depending on their previous salaries -- to start a business, Golikova said. The Cabinet decided Monday to make all payments total 58,800 rubles, Golikova said. She didn't say when the decision would take effect.

So far, about 52,000 people have applied for the money, mostly planning to set up sewing or agricultural businesses, she said. If successful, these startups may create a further 150,000 jobs, she said.