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).
