Forecast of CBA for 2022: Reduction of seasonal labor migration due  to the unfavorable economic situation in the Russian Federation will  increase the unemployment rate in Armenia to 16.7%

ArmInfo.The reduction in seasonal labor migration, due to the unfavorable economic situation in the Russian Federation, will increase the unemployment rate in  Armenia in 2022 to 16.7%, and in the medium term this figure will  remain in the range of 16.4-16.9%.

The Central Bank has issued a similar forecast for Q1 2022 in its  Monetary Policy Plan (MPP) published on March 29, where it is also  noted that expectations for GDP growth for 2022 have worsened to 1.6%  from the previous 5.3% (against 5.7% growth in 2021). The forecast  report of the Central Bank of the Republic of Armenia notes that as a  result of the reduction in the migration of seasonal workers from  Armenia, they will become part of the economically active population  of the country, replenishing either the ranks of the unemployed or  employed population, which will also have a restraining effect on  wage growth.

"The projected scenario of economic development will affect the labor  market of Armenia, mainly by curbing the growth of wages in the  private sector due to the weakening of gross demand and the slowdown  in economic activity," says the report of the Central Bank of the  Republic of Armenia, which estimates that wages in the private sector  will increase in 2022 by 6.7%.

In the same report, the Central Bank of the Republic of Armenia also  provides a forecast for 2022 for the Russian economy and the  inflation expected there. In particular, a 6% economic downturn is  expected in Russia, while inflation will reach 13.6%. This is due to  the Russian-Ukrainian military-political conflict, with a sharp  increase in the uncertainty of geopolitical and economic prospects,  as well as the negative consequences of large-scale sanctions against  Russia.

It should be noted that the data on the unemployment rate for the  whole of 2021 has not yet been published by the RA Statistical  Committee. But according to statistics, as of October 1, 2021, the  unemployment rate in Armenia decreased to 15% (from 18.2% a year  earlier), in particular, amounting to 15.1% among women and 14.8%  among men. As of this date, 37.8% of the total population was  employed in the country's economy, including 30.8% of women and 45.7%  of men. And in 2020, the unemployment rate in Armenia fell to 16%  from 17.1% in 2019, while the employment rate remained almost  unchanged, moving slightly from 47.8% in 2019 to 47.6% in 2020.