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    Categories: 2017

In last decade GVA per employee/ capita in Armenia records noticeable increase

Armenpress News Agency, Armenia
 Wednesday


In last decade GVA per employee/ capita in Armenia records noticeable increase



YEREVAN, JULY 19, ARMENPRESS. Labor productivity has been increasing
in Armenia but the pace lags behind the world, according to the
National Competitiveness Report of Armenia 2017, reports Armenpress.

“Staying competitive requires a rise in productivity that is higher
than that of competitors. This is a constant race. In the last decade,
Gross Value Added (GVA) per employee/ capita in Armenia recorded a
noticeable increase. In the period of 2010-2015, GVA per employee
increased by around USD 1,700 (2010 constant USD) at 3% Compound
Average Growth Rate (CAGR). CAGR of GVA per capita is even higher at
5% mostly due to the decreasing population rate”, the report said.

According to the report, based on the 2015 data, Armenia is ranked
110th in the world in the GDP per person employed (PPP, constant 2011
international $).

“Labor productivity has been the key determinant of Armenia’s GVA per
capita increase and needs further enhancement through tradable
sectors. In the period of 2005-2014, GVA per capita in Armenia
increased by more than half, reaching around USD 3,420. The
decomposition of the performance demonstrates that labor productivity
(value added per employee) accounts for two-thirds of the growth.
Employment growth accounts for around one-quarter, and increased labor
force participation accounts for only 8%”, according to the report.

The report says further enhancement of productivity should be led by
predominantly tradable sectors.

“This productivity rise will positively impact adjacent service
sectors. Increased productivity will eventually disseminate to the
non-tradable industries. Competition in the labor market will act as
the key gear mechanism through rising wages in tradable industries.
However, developments in traditional sectors, particularly
agriculture, will largely account for the scale and payoff of the
transformation within the economy. Productivity increases in these
sectors are expected to lead to a certain net loss of jobs in the
sector (beyond increased jobs due to expanded output). Opportunities
created in other tradable sectors in the economy would need to absorb
excess labor from traditional sectors and agriculture. This absorption
necessitates significant structural shifts and skills upgrading”,
stated in the report.

Varazdat Torgomian:
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