Thursday, December 28 2023 15:41

ArmInfo. According to the new  forecast of the Central Bank for 2023, the unemployment rate will be  below 13% (against the actual 13% in 2022), while according to its  previous forecast (September), the bank expected an increase of up to  14%. But in the medium term, in parallel with the recovery in demand,  the unemployment rate will stabilize near its long-term sustainable  level of 15%. This is noted in the Central Bank's Monetary Policy  Program (MPP) for Q4 2023, published at the end of December, where  GDP growth expectations for 2023 indicate a less noticeable slowdown  in rates to 8.3% (from 12.6% in 2022) and further to 6.1% in 2024 and  5.7% in 2025.

By comparison, the actual unemployment rate rose from 17.9% to 18.1%  in 2019-2020, then began to decline to 15.3% in 2021, and then to 13%  in 2022. . Judging by the forecast updated in December by the RA  Central Bank, the unemployment rate will continue to decrease in  2023, but not as noticeable as a year ago. However, it is noteworthy  that after its March forecast, which expected the unemployment rate  to decrease to 12.6%, the Central Bank later changed the expectations  of this indicator to 13.4% growth in June and 14% growth in  September, but already in December it adjusted its forecast  trajectory to 13.%- decrease, which characterizes the positive GDP  gap formed during the year (inflationary gap, indicating that the  growth of aggregate demand exceeds the growth of aggregate supply,  possibly leading to inflation).  In its forecast report, the Central  Bank notes that increased labor supply will at the same time ease  inflationary pressures from the labor market, which in turn will be  reflected in private sector wage growth slowing to 16% as a result of  an adjustment to higher demand and some reduction and anchoring of  inflation expectations.

In the medium term, the slowdown in wage growth in the private sector  will continue to the range of 7-8%, which will be determined by the  dynamics of such key indicators as economic development and  inflation.  Thus, in the near future, inflationary pressure emanating  from the labor market will weaken to a certain extent, under  conditions of which expenses per employee in the reporting year will  increase by almost 10%, but in the medium term the pace will slow  down and stabilize around 4%. 

The Statistical Committee of the Republic of Armenia has so far  published only the unemployment rate data for the first and second  quarters of 2023. Thus, the unemployment rate in Armenia in Q2 2023  decreased from 13.7% to 11.7%, being lower than last year's 13% in  the same period of 2022. For the entire 2022, the unemployment rate  decreased from 15.5% to 13%, having previously shown an increase from  17.9% to 18.1% in 2019-2020. It is noteworthy that the unemployment  rate of 13.6% forecasted by the Central Bank for 2022 differed  slightly from the actual figure (13%), which was also observed  according to the forecast level of 15.7% for 2021  (versus the actual  15.5%), and The forecast of 19% and 18.9% in 2020 and 2019,  respectively, was significantly higher than the actual 18.1% (2020)  and 17.9% (2019).