CBA further improves its forecast of unemployment rate: It is  expected to decrease to 14.1% in 2022

ArmInfo. In the new forecast for 2022, the Central Bank further improved its expectations for the unemployment rate in Armenia. It is expected that it will decrease to  14.1% (from 15.3% in 2021), against the previously forecasted decline  to 14.8%. But in the medium term, the unemployment rate is expected  to rise to 15%, which is also below the previously indicated forecast  range of 15-16%.

Such a forecast is given in the Monetary Policy  Program (MPP) of the Central Bank for the third quarter of 2022,  published on September 28, where it is also noted that the next  improvement in expectations for GDP growth for 2022 from the previous  4.9% to 12.9% (against 5.7 % growth in 2021).

Nominal wages in the private sector will maintain high growth rates -  about 15% in 2022 (against the previously indicated 11.7%). In the  medium term, with a gradual adjustment in demand and stabilization of  inflation near the target threshold, wage growth in the private  sector will slow down and stabilize in the range of 7-8%.

Thus, in 2022, inflationary pressure will continue to come from the  labor market, due to a noticeably prevailing increase in wages in the  private sector over productivity. Under these conditions, the growth  of costs per employee during the current year will be about 5%, and  in the medium term, with the weakening of inflationary pressure, the  growth in costs for labor force will stabilize in the range of 3-4%.  It should be noted that according to the RA Statistical Committee,  the average y-o-yl unemployment rate in Armenia decreased to 15.3% in  2021 from 18.1% in 2020.