Monday, September 14 2020 20:22

ArmInfo. The inflow of transfers from Russia to Armenia in January-July 2020 sharply accelerated the y-o-y decline to 28.2% from 2.9% in the same period  of 2019. At the same time, the outflow of transfers from Armenia to  Russia increased by 0.9% from 1.6% decline a year earlier.

This slowed down the y-o-y decline in the net inflow of transfers from  Russia to 49.2% in January-July 2020 from 3.9% in January-July 2019.  According to the Central Bank of Armenia, the inflow of transfers  from Russia amounted to $ 399.3 million in January-July 2020, and the  outflow to the Russian Federation - $ 235 million, which formed a net  inflow in this direction at the level of $ 164.3 million. The gap  between the inflow and outflow of transfers in the direction of  Armenia- Russia shrank from 4 to 2-fold in five years.

Deterioration in dynamics is also observed in transfers to the USA.  In particular, the y-o-y growth of inflows from the United States  slowed to 22.1% in January-July 2020 from 30.8% in the same period of  2019, with the reversal of the outflow trend in the United States  from 53.4% growth towards 54.8% decline. As a result, the volume of  inflow of transfers from the United States amounted to $ 184.5  million in January-July 2020, and an outflow of $ 73.7 million,  forming a net inflow of $ 110.8 million (with a y-o- y growth of  9-fold, out from negative to positive level).

In total, the inflow of transfers from individuals to Armenia turned  the y-o-y dynamics in January-July 2020 towards a 15.3% decline from  9.1% growth in the same period of 2019, amounting to $ 893.3 million.   The same deterioration in the trend was observed in outflow of  transfers - a reversal from 23.2% growth to 20.3% decline, the volume  of which amounted to $ 622.4 million. As a result, the y-o-y dynamics  of the net inflow of transfers lingered in decline with a slowdown  from 17.6% in January-July 2019 to 1.2% in January-July 2020, with a  subsidence in absolute value to $ 270.9 million. In the inflow,  Russia's share decreased in January-July 2020 to 45% from 53% in  January-July 2019 (against 59% in January-July 2018) , while  increasing in the outflow - from 30% to 38% (against 37% in  January-July 2018). And the share of the USA in the inflow, on the  contrary, increased in y-o-y terms from 14% to 21% (against 12% in  January- July 2018), while decreasing in the outflow from 21% to 12%  (against 17% in January-July 2018).

In January-July 2020 (July compared to December 2019), the inflow of  transfers from individuals to Armenia decreased by 17.8%, and in July  alone with a sharp slowdown in growth to 4.9% from 66.1% in June,  while a year earlier seven-month rise of 8.6% was accompanied by a  July rise of 16.5%. A similar downtrend was registered in outflow -  by 33.8% in seven months with a trend reversal in July towards a  20.8% decline from June 90.6% growth, against last year's 17.3%  growth in seven months with a 14.4% growth in July. In the structure  of inflow, the seven-month decline in transfers from Russia by 25.5%  was accompanied by a slowdown in growth in July to 10.9% from 68.6%  in June, while the outflow of transfers to the Russian Federation was  in decline in seven months (by 29.2%). %) and in July (by 18%,  against the June 2-fold growth). As for transfers to the USA, the  seven-month dynamics of inflow and outflow is multidirectional, while  the July trend in both cases is upward. Thus, an increase in the  inflow of transfers from the United States for seven months by 45%  was accompanied by a decline in outflow by 26.1%, and in July alone,  an increase in inflow and outflow amounted to 26.4% and 28.9%,  respectively (against the June increase in inflow by 39.6% and a  49.2% decline in outflow). As a result, the net inflow of transfers  from Russia was in decline over seven months (20.3%) with a sharp  acceleration of growth in July to 98.8%, and from the USA it was in  growth over 7 months - by 87.8% with a significant slowdown growth in  July to 25.7%. As a result, the seven-month dynamics of the current  year in comparison with the last year recorded a significant drop in  rates.

According to the June forecast of the Central Bank of Armenia for  2020, a significant decline in the inflow of private transfers from  individuals is expected - by 22-25% (against an actual growth of 9.7%  in 2019, moreover from Russia - with the trend emerging from the  recession by 0.6% growth). The Central Bank explains the  deterioration of the forecast for remittances of individuals by a  significant recession in the Russian economy amid a sharp drop in oil  prices. In parallel, a temporary ban on entry to the country imposed  by Russia as part of measures to prevent the spread of the  coronavirus pandemic will have a significant impact on the decline in  remittances. But the Central Bank of Armenia notes that, in contrast  to previous years, in 2020, the impact of the decline in remittances  on GDP has incomparably decreased. The Central Bank revised this  forecast for transfers along with the deterioration of expectations  for Armenia's GDP towards a decline of 4% in 2020. According to the  Central Bank of Armenia, in 2019 the share of Russia in the structure  of the inflow of private transfers decreased from 59% to 54%, while  also decreasing in the outflow - from 40% to 29%.

The World Bank in its June forecast for 2020 predicts a decline in  Russia's GDP by 6%, and expects a slightly larger decline in the US  economy - by 6.1%, and in Armenia's GDP it predicts a 2.8% decline.  At the same time, the June IMF forecast expects a more serious  decline in Russia's GDP in 2020 - by 6.6%, and a fall in the world  economy by 4.9%, and the US economy - by 8%, which will deepen the  negative forecast for Armenia's GDP (from 1, 5% decline according to  the April forecast of the IMF). According to official Russian  estimates (updated): the Central Bank of the Russian Federation  expects a fall in Russian GDP in 2020 in the range of 4.5-5.5%, the  Ministry of Economic Development of the Russian Federation - by 3.9%.