Standard of living of population largely decreases in Armenia

The standard of living of a major part of the population has greatly decreased amid high rates of economic growth in Armenia.

The real average salary increased by 6.4 per cent, in the private sector - by 9.6 per cent, while in the public sector (covering 30 per cent of employees) decreased by four per cent, the Luys Foundation told the Armenian media, according to Caliber.Az.

“The real wage growth lags far behind the result in the economy. Economic performance in 2022 is not based on factors that are sustainable and increase the potential of the economy,” the report said.

According to the report, high economic activity was observed, on the one hand, as a result of the influx of workers and capital from Russia, while on the other hand, as a result of an unprecedented increase in re-exports from Armenia amid sanctions imposed on Russia. However, the geopolitical factors that caused these processes may change and cause a slowdown in economic growth.

“The high economic activity of 14.2 per cent cannot be considered sustainable. The share of industry in the economy will decrease, which shows the unsatisfactory "quality" of economic growth. Investment activity is declining, as enterprises place free funds in banks instead of investing, while new loans are not attracted,” the report says.