Shock of payment balance of Armenia is in the offing: Net inflow of transfers from Russia to Armenia dropped twofold in 2015

ArmInfo. In 2015, the net inflow of transfers from Russia to Armenia fell from $1.3 bln to $719 mln, having actually dropped twofold and almost approaching the level of the crisis-affected year 2009 ($760 mln, twofold year-over-year decline).

By the data of the Central Bank of Armenia (CBA), over the past three years, the prevalence of the inflow of transfers from Russia to Armenia over the outflow from Armenia to Russia dropped from 8.5-fold to 3.3- fold (versus 4.5-fold in 2009) because the inflow dynamics sharply changed from positive 20% to negative 36% amid the outflow growth slackening from 35% to 12%. It should be noted for comparison that in the crisis-affected year 2009 the inflow of transfers from Russia dropped by 35% amid the 16% growth in the outflow to Russia, which is almost similar to the trend of 2015. However, the factors that triggered reduction in transfers were different in 2015 and 2009. Six years ago, the situation deteriorated due to the global economic crisis, whereas now the unfavorable consequences are due to the long-term factors - sharp decline in oil prices and international sanctions against Russia, which has the biggest share (up to 63%) in the incoming transfers to Armenia.

The decline in the difference of transfers to Armenia from Russia and vice versa started from 2014 (down 13%), whereas the past 4 years experienced growth: in 2010 - $942 mln (+24%), in 2011 - $1.2 bln (+25%), in 2012 - $1.4 bln (+18.2%), in 2013 - $1.5 bln (+7.2%).

Over the past two years, the inflow of transfers from Russia to Armenia dropped almost by $730 mln, in 2015 alone - by $554 mln to $1.002 bln versus the smaller decline in 2009 (by $512 mln).

Experts are inclined to think that the situation will deteriorate and boost the migration of seasonal workers from Russia. If the economic situation in Russia fails to improve, the transfers may decline even more. The reduction in transfers and import by 26.5% demonstrates the decline in consumer demand and in real revenues of the population.  Independent experts think that the trend of decline in transfers and commodity turnover may cause a shock of payment balance of Armenia.