Central Bank of Armenia forecasts decrease in unemployment rate to 12.6% for 2023

ArmInfo. The Central Bank forecasts a decrease in the unemployment rate to 12.6% for 2023 (from an estimated 13.6% in 2022). But in the medium term, with a certain adjustment in demand and economic growth potential, the unemployment rate will stabilize near 15%. This forecast is given in the Monetary Policy Program (MP) of the Central Bank published on March 28 for Q1 2023, which also indicates the forecast 5.8 % GDP growth in Armenia for 2023 (against actual 12.6% in 2022).

In line with the ongoing economic growth and inflationary environment, nominal wage growth in the private sector will be quite high in 2023 at almost 18%. In the medium term, with the gradual adjustment of demand and inflation, the growth of salaries in the private sector will slow down and stabilize at 7-8%.

Thus, in 2023, inflationary pressure will continue to come from the labor market, due to a markedly prevailing increase in wages in the private sector over productivity. However, as productivity grows, the cost per employee will decrease in the medium term and stabilize around 4%. It should be noted that the RA Statistical Committee has not yet published data on the unemployment rate for 2022. But for 9 months of 2022, there is data, according to which the unemployment rate decreased quarterly: from 14.8% in Q1 to 13% in Q2 and further to 11.6% in Q3. And in 2021, the average y-o-yunemployment rate in Armenia decreased to 15.3% from 18.1% in 2020.