ArmInfo. In 2023, the real incomes of Armenian families have experienced growth. Aghasi Tavadyan, an expert at the Amberd Research Center and founder of the tvyal.com analytical portal, wrote on his Facebook page. Particularly, in 2023, the average family income increased by 15.3% (331,000 drams). After a decline in the previous year, high inflation (8.3%) significantly reduced real incomes. However, in 2023, there was price stability (official inflation was -0.6%) and growth from 2022. This eventually led to an increase in the standard of living. The adjusted income of the average family increased by 15.3%, from 287,000 AMD to 331,000 AMD. At the same time, the income of the poorest category of the republic's residents (high threshold) increased by 23.2%, from 95,000 AMD to 117,000 AMD. Additionally, the income of the richest 10% (lower threshold) increased by 14.5%, from 670,000 AMD to 767,000 AMD.
Regional inequality
However, this growth, as noted by Tavadyan, was not evenly distributed across all regions. In Yerevan, the average income increased by 15%, which aligns with the national average. When comparing the growth of real household income in 2020, a different picture emerges. From 2020 to 2023 (including Yerevan), the real income of the population increased by 16.6%. Growth was also recorded in the Aragatsotn and Gegharkunik regions. In all other regions, basic household incomes either decreased or stayed the same from 2020. Redistribution of income groups
The data for 2023 shows an interesting regrouping of income groups. 35.1% of families belong to the middle and high income group (256-512, 000 AMD), indicating the strengthening of the middle class. The middle and low income group (128-256, 000 AMD) is 27.1%. , the economist noted. According to him, income inequality has somewhat decreased. In 2022, the income of the richest 10% exceeded the income of the poorest 10% by 7.05 times; in 2023, this ratio fell to 6.56. This is a positive trend, although inequality remains high by international standards. At the same time, Tavadyan notes that the data is available since 2005. Since 2005, household incomes adjusted for inflation have shown steady growth. According to the data, the largest growth in real incomes of the population was observed in 2006, 2007, and 2019.
Relationship between inflation and real incomes
The growth of real incomes in 2023 was mainly attributed to price stability. By containing inflation, nominal wage growth was able to directly impact the increase in real incomes. According to official data, inflation in 2023 was -0.6%, a significant improvement from 2022, when economic growth of 12.6% was not reflected in the population's income due to high inflation (8.3%). In 2022, economic growth reached 12.6%, with GDP per capita rising from 4972 to 7018 USD, marking a 41% increase. However, real incomes for the population actually decreased. In 2021, the average adjusted household income was 333,000 AMD, which then dropped to 320,000 AMD in 2022. The poorest 10% of the population received up to 101,000 AMD in 2021, but this decreased to 88,000 AMD in 2022. Nominal income growth was also recorded in 2021 and 2022. However, inflation rates were high at 7.2% and 8.6% respectively during these years, significantly reducing real income. This means that by the end of 2022, wages had not kept pace with the inflation rate. Despite the 12.6% economic growth in 2022, this had not yet been reflected in household income or wage growth. By the end of 2023, inflation was almost zero, as the expert pointed out.
Conclusion
Armenia's household income growth in 2023 indicates economic recovery. However, regional inequality and significant income stratification remain serious problems. Price stability played a significant role in real income growth, highlighting the importance of macroeconomic stability in improving living standards.
