ArmInfo. According to the updated forecast of the Central Bank of Armenia, the unemployment rate in 2020 will be 20.4%, after which, with a slow economic recovery, this indicator will annually decrease by 0.3-0.5 percentage points in the medium term to 19.6% (against the previously expected 17.3% after a y-o-y decline of 0.8-1.2 percentage points). This forecast is given in the Central Bank's Monetary Policy Program for the Q2, 2020, which noted a deterioration in the forecast for GDP for 2020 expecting a 4% decline (against the previously expected stagnation growth of 0, 7%).
The Central Bank has revised its forecast for unemployment, given the expected economic downturn in the current development of the coronavirus pandemic, as a result of which business hours will be reduced by business entities. At the same time, the influence of these factors on unemployment is extremely uncertain, since the spread of coronavirus can lead to a reduction in the supply of labor. An incomplete estimate of the unemployment rate in the second quarter of 2020 is the result of not counting in the calculations of many workers who were left without work during the pandemic. The Central Bank also predicts that in enterprises, along with a slowdown in productivity growth rates, nominal labor costs will accelerate.
Regarding nominal wages in the private sector, the Central Bank predicts a slight slowdown in growth to 6.8% in 2020, stipulating its expectations both by raising minimum wages and by changing the structure of average wages, since workers in the most vulnerable sectors on the list of temporarily prohibited economic activities because of coronavirus, are mainly people with a lower than average payment. Even in the April statistical data, which recorded an increase in the average wage by 9.8%, there was an explanation about the absence in the calculations of temporarily idle workers due to a pandemic, if taken into account, there would be a slowdown in the growth of average wages. Given this factor, the Central Bank estimates that wage growth in the private sector slowed in April to 6.3%, instead of the published 12.8%. And already in the medium term, the growth rate of nominal wages in the private sector will correspond to projected economic development and inflationary expectations. In particular, for 2021, the Central Bank expects nominal wages in the private sector to grow by 6.4% with stabilization at the end of the forecast period at about 7.1%.
According to the RA Statistical Committee, in 2019, the average annual unemployment rate in Armenia was 18.9%, compared to 20.5% in 2018 and 20.8% in 2017. It is noteworthy that the actual unemployment rate recorded in 2019 completely coincided with the indicator predicted by the Central Bank. The full coincidence of the Central Bank forecasts with the actual unemployment rate was also recorded at the end of 2018, and in 2017 the figure obtained was only 0.1 percentage points below expectations of the Central Bank. It is appropriate to note that since 2019, the unemployment rate has been calculated according to the new method, excluding those employed in the household, in accordance with which the indicators have also been recounted in comparable dynamics. In this regard, the Central Bank in 2019 in its forecasts began to indicate the level of unemployment already in the calculation according to the new methodology.
According to statistical data, as of January 1, 2020, according to the new methodology, the number of employed people in Armenia reached 946.8 thousand people (with a y-o-y growth of 4.3%) or 46.8% of the economically active population (against 45.2% in 2018). And there were 220.5 thousand unemployed on this date, with a y-o-y decline of 5.8%.
