FALL IN UNEMPLOYMENT REPORTED IN ARMENIA OVER 2008

Global Markets Research Centre
Feb 19 2009

According to the Armenian National Statistical Service, the
unemployment rate in the county last year registered 6.3%, falling
further after standing at 7.0% in 2007 and at 7.4% in 2006. The number
of people officially registered as unemployed averaged 74,900, in a
fall of 10.5% from the previous year. Further, official labour market
figures show that, the number of employed people totalled around
1.120 million, rising by 1.7% from the previous year. The average
nominal wage for last year was reported at 91,331 dram ($299US),
marking growth of 17.4% from 2007, but real wages stood at a lower
level of 83,790 dram. In addition, ARKA News reports that at the
end of December, the official number of unemployed per one vacancy
reported at the State Employment Agency reached 115.

Significance:The government expects unemployment to considerably
increase in the coming months. Given that economic growth is now
significantly cooling, this is indeed likely. Notably, activity in the
construction sector, which in recent years has played a very important
role in supporting growth, is moderating, and this will be further
reflected in the labour markets. While the message of deteriorating
conditions in the Armenian labour market given by the latest data can
be trusted, caution is warranted regarding the actual data. This is
because only a low share of the unemployed register as job seekers,
due to the still poor incentives of doing so. Consequently, the true
jobless rate is likely to exceed the reported one.