In a context of partial recovery of labour indicators, the Russian aggression against Ukraine has made the outlook for labour markets in the region more complex. Slowdown in economic growth makes full employment recovery more difficult and increases the risk of informalisation, while accelerating inflation negatively impacts real labour and household incomes. This adds to the enduring distributional effects of the pandemic in a region characterised by very high levels of inequality. Loss of purchasing power can increase in-work poverty, even among those in formal employment. Addressing and reversing this scenario requires an integrated and far-reaching set of different types of policies. In particular, policies to sustain formal employment are needed in order to prevent transitions into informality. Strategies to support the creation of new formal jobs and the strengthening of labour institutions are also required. Tripartite dialogue plays a key role in enabling this path to be followed, taking into account the needs and possibilities of workers and employers.

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