Friday, February 24 2017 23:24
Karine Melikyan

Central Bank of Armenia forecasts insignificant unemployment reduction by 2020

Central Bank of Armenia forecasts insignificant unemployment reduction by 2020

ArmInfo. According to the Central Bank of Armenia (CBA), in 2017 unemployment in Armenia will make up 18.5%, with annual reduction by 0.3-0.4 pct points to 18- 18.2% and 17.6-18% in 2018-2019, respectively. The CBA's previous forecast made in November 2016 pointed out 18.3% unemployment for 2017, and growth from 17.8% to 18.1% for 2016. The updated (February) forecast is published in the CBA's monetary policy program for Q1 2017, which says that the low demand for labor force due to the low economy activity in 2016 will gradually recover due to the acceleration of the economic growth. This, in turn, will slowly increase employment.

To note, according to official statistics, unemployment in the country made up 18.5% in 2015, 17.6% in 2014, 16.2% in 2013. In Jan-Sept 2016, unemployment grew from 18.2% (in Q1) to 18.4% (in Q2), and dropped to 18.1% (Q3).

The CBA reports that the average nominal salary is expected to rise by 1.5% in 2017, by 3.6-4% in 2018 and by 4.8-5.2% in 2019 (versus previously expected 2%, 5% and 6.2% in 2017-2019). In H1 2017, the salary growth rates will be lower than the productivity growth rates.  This will result in 0.2-0.3% deflationary pressure on the consumer market and the labor market influence on the inflation will be neutral. In the private sector the average salary will rise by 3.6% in 2017, by 4.7% in 2018, and by 6.1% in 2019. In the public sector, due to the Government's optimization policy, the salary fell in 2016.  In 2017, the average nominal salary in the public sector will drop by 1% (versus the previous expected 0.4% growth).  By the CBA forecasts, in 2018-2019 the salary growth in the public sector will accelerate due to the competition with the private sector. In 2018, the salary in the public sector will grow by 2.9%, in 2019 - by 4.5%. To note, in 2016 the minimum salary was not revised and it was retained at 55,000 AMD, which came into effect on 1 July 2015. In 2017, it will not be revised either.

According to the National Statistical Service of Armenia, in Jan-Dec 2016 the nominal salary in Armenia grew by 1.7% versus Jan-Dec 2015, amounting to 187,850 AMD ($391). In Dec 2016 versus Dec 2015, the nominal salary dropped by 0.4%. In the public sector the salary made up 161,872 AMD ($337) in Jan-Dec 2016 (down 1.8%), while in the private sector it grew by 4.6% to 221,850 AMD ($462).

Meanwhile, according to WB forecasts, poverty in Armenia would drop from 25.6% (in 2015) to 24.9% (in 2016), and to 24.1-23.2% in 2017-2018.

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