Armenian Central Bank improves unemployment rate forecast for 2022
YEREVAN, October 3. /ARKA/. Armenia's Central Bank expects the annual unemployment rate in 2022 to be 14.1%, below the projected medium-term rate of 15%, due to positive economic developments, fueled partly by higher demand.
This forecast is contained in the regulator’s monetary policy program for the 3rd quarter of this year. In the previous report, the Central Bank predicted 14.8% unemployment rate for 2022.
In the second quarter of the year, the unemployment rate was 13.8%, which is lower than the regulator's previous estimate. The drop in the unemployment rate was mainly due to an increase in demand and subsequent economic activity.
Private sector wages rose mainly in the services sector, reflecting a significant increase in demand. Real private sector wage growth in the second quarter, with inflation rate calculated, was about 6%. With a continued positive GDP gap in 2022 and a high inflationary environment, the Central Bank expects private sector wage growth of about 15%.
Nevertheless, a certain slowdown in private sector wage growth is expected in the medium term with gradual refinement of demand and stabilization of inflation around the target. As a result, wage growth will stabilize around 7-8% at the end of the horizon.
According to the National Statistical Committee, the 12-month inflation in Armenia's consumer market in August 2022 was 9.1%.
The Armenian government’s growth projection for 2022 is 7%; the inflation is set at 4% (± 1.5%). According to the World Bank’s latest Global Economic Prospects report, Armenia's GDP in 2022 is expected to grow by 3.5%, down 1.3 p.p. from the previous forecast, made in January. World Bank analysts expect Armenia's GDP to grow by 4.6% in 2023 (0.8 p.p. down from the January forecast) and by 4.9% in 2024.
The International Monetary Fund (IMF) expects Armenia's GDP growth to reach 5 percent in 2022, while inflation is projected to increase temporarily before moderating by the end of the year.
The Asian Development Bank (ADB) said in its September update of the Asian Development Outlook report that it expects Armenia’s economy to grow by 7% in 2022 and to slower to 4.5% in 2023.-0-
