In the third quarter of 2024, Armenia's economy exhibited mixed trends: rising unemployment paired with low inflation and an increase in officially registered workers. These findings were outlined in the Central Bank of Armenia's quarterly economic review.
According to the regulator, the unemployment rate in the second quarter of 2024 reached 13.8%, two percentage points higher than the same period last year. The report noted that the rise in unemployment resulted from a reduction in the number of employed individuals rather than an increase in the labor supply.
"The labor market remains uncertain," the Central Bank stated. On one hand, there is a decline in foreign workers and a slowdown in wage growth. On the other hand, the number of officially registered workers has risen by approximately 34,000 over the past year, which could indicate both tightening labor market conditions and a reduction in shadow employment.
The Central Bank highlighted modest wage growth in the private sector, though it remains below the levels of productivity growth and the inflation target. Additional pressure on the labor market may come from a reduced flow of labor migrants to Russia, driven by uncertainty surrounding Russia's economic growth prospects and the ongoing devaluation of the ruble.
As for inflation, the Central Bank reported an annual rate of just 1.4% in November 2024, staying below the target level since April 2023. "The weak inflationary environment is primarily due to deflationary pressures from the external sector and declining foreign demand for certain services," the report noted.
Inflation for non-tradable goods, which largely reflects the impact of domestic demand, remains relatively stable at an annual rate of 2.5%.
The regulator also pointed out that the increase in global food prices has not yet been fully reflected in domestic prices, while prices for imported non-food goods continue to decline. This trend is primarily attributed to the ongoing drop in producer prices in China.
