ArmInfo. The nominal GDP of Armenia in the conditions of 7% economic growth will grow by about 839 billion drams (about 1.7 billion US dollars, the estimated exchange rate of the Armenian dram to the dollar is 493.6 drams per 1 dollar) - up to 7.869.4 billion drams. This is stated in the draft state budget for 2022, presented for preliminary discussion by the National Assembly.
So, according to the document, by the end of this year, the nominal GDP, compared with the indicator set in the budget for 2021, will increase by 635.9 billion - up to 7.031.2 billion drams. GDP growth by the end of this year will amount to 6.5%, against the fixed 3.2%.
Gross supply is higher than gross demand
Economic growth in 2021 will be mainly driven by the outstripping growth in the service sector (including trade) - 8.1%. Industry, agriculture and construction will also grow - 4.3%, 5.6% and 1.5%, respectively. In 2022, industry will grow by 8%, construction by 18%, and services and agriculture by 5.9% and 3.9%, respectively.
In 2021, in the conditions of gradual weakening of the negative impact of the pandemic and war in Artsakh, the final consumption in real terms will increase by 7.7%, and the investments - by 3.6%.
In 2022, consumption will grow by 4.7% and investment by 22.5%. It is noted that the growth of investments will be due to large state investments in infrastructure projects (growth of 46.2%), as well as, as a result of state policy to stimulate private investment - by 15.6% (both domestic and foreign investments). This year, exports and imports will grow by 7.6% and 8.2%, respectively, and in 2022 by 14.3% and 15.3%, respectively.
Labor market
In Q12021, unemployment decreased by 2.7 percentage points compared to the same period in 2020 - up to 17%. The number of unemployed was 17.1% -193 thousand people. At the same time, the number of employed decreased by 0.2% - to 943.8 thousand people. The volume of labor supply (economically active population) also decreased - by 3.6% - to 1,136.8 thousand people.
In January-July 2021, the average monthly nominal salary increased by 5.7% - up to 197,881 thousand drams. With a 6.1% rise in consumer prices, real wages fell 0.4%. The average monthly salary in the public sector increased by 3.6% - up to 171,763 thousand drams, and in the private sector - by 6.5%, amounting to 210,336 thousand drams.
Inflation and monetary policy
In January-August 2021, compared to the same period in 2020, inflation accelerated, amounting to 8.8%. It is noted that the high inflationary environment during the year was associated with an increase in prices for food and raw materials on the international market, the devaluation of the dram and a seasonal increase in prices for some goods (in particular, vegetables). In the short term, the Central Bank considers it necessary to continue the monetary policy aimed at neutralizing the risks of accelerating inflationary expectations, while maintaining, if possible, favorable conditions for the recovery of full-fledged demand. As a result, according to forecasts of the financial authorities, inflation by the end of 2021 will amount to 7.4%, and by the end of 2022 it will be at the level of 5.2%. Fiscal Policy
In order to maintain a stable fiscal environment and economic recovery, fiscal policy in 2021 will be constraining, and in 2022 the impact of fiscal policy on aggregate demand will be neutral.
So, state revenues and official grants from the state treasury in 2022 from the expected 23.6% by the end of this year will grow to 24.7% of GDP, tax revenues and duties will increase from 22.5% to 23.4% of GDP. State budget expenditures, instead of 28.2% expected at the end of this year, will decrease to 27.8% of GDP, and current expenditures will also decrease - from 25.1% to 23.45 GDP. Transactions in non- financial assets will amount to 4.45, against 3.2% expected by the end of 2021, the budget deficit will be reduced to 3.1% from 4.7% expected by the end of 2021. Government debt in relation to GDP will decrease by 0.6 p.p. - from 60.8% at the end of 2021 to 60.2% projected by December 31, 2022.
