Wednesday, September 30 2020 21:24
Karine Melikyan

Central Bank slightly improved its forecast for 2020 on the decline  in private transfers to 19-22% from the previous 22-25%

Central Bank slightly improved its forecast for 2020 on the decline  in private transfers to 19-22% from the previous 22-25%

ArmInfo. The Central Bank of  Armenia slightly improved its forecast for 2020 for a decline in the  inflow of private transfers to 19-22% from the previously expected  22- 25%. This is set out in the Central Bank's Monetary Policy  Program for the Q3 of 2020, published on August 30, where the  forecast for Armenia's GDP for 2020 was revised towards a larger  decline by 6.2%, against the previously predicted 4% decline. The  Central Bank causes a slight improvement in the outlook for  individual remittances by a significantly lower than expected decline  in their volume in the second quarter.

The Central Bank of Armenia draws attention to the change in the  country structure of private transfers: the reduced volume of  transfers from Russia is being compensated by remittances from the  USA and other countries, presumably due to the growing transfers of  an "altruistic" nature.  To note, according to the Central Bank of  Armenia, the inflow of transfers from individuals to Armenia  accelerated growth in 2019 to 9.7% from 1.7% in 2018, amounting to $  1.959 billion. At the same time, the growth rate of the outflow of  transfers accelerated slightly - from 20.1% in 2018 to 22.4% in 2019,  amounting to $ 1.455 billion. This slowed down the decline in the net  inflow of transfers from 22.1% in 2018 to 15.5% in 2019, having  formed at the level of $ 504 million. The share of Russia decreased  in 2019 both in inflow from 58.8% to 53.9%, and in the outflow - from  39.7% to 29.3%. The inflow of transfers from Russia to Armenia in  2019 turned the trend vector towards growth by 0.6% from a 1.4%  decline in 2018. At the same time, the dynamics of money outflow in  the Russian Federation turned towards a decline of 9.7% from 25.4%  growth in 2018. This brought the trend of net inflow of transfers  from Russia from a 16.1% decline in 2018 to a 9% increase in 2019.   But in 2020, the coronavirus pandemic and the restrictive measures  introduced led to a drop in the pace of private transfers. Thus, in  January-July, the inflow of transfers from Russia to Armenia 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 grew by 0.9% from 1.6% decline a year earlier. This slowed  down the annual decline in net inflow of transfers from Russia to  49.2% in January-July 2020 from 3.9% in January- July 2019. A  deterioration in the dynamics was observed in transfers to the United  States, in particular, the annual growth of inflows from the United  States slowed down to 22.1% in January-July 2020 from 30.8% in the  same period of 2019, with a reversal of the outflow trend in the  United States from 53.4 % growth towards a 54.8% decline, as a result  of which the net inflow jumped 9-fold (with an exit from the negative  level to the positive one).

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. The same deterioration in the  trend was observed in the outflow of transfers - a reversal from  23.2% growth to 20.3% decline. As a result, the annual dynamics of  the net inflow of transfers lingered in a decline with a slowdown  from 17.6% in January-July 2019 to 1.2% in January-July 2020. In the  inflow, the share of Russia decreased in January- July 2020 to 45%  from 53% in January-July 2019, while increasing in the outflow - from  30% to 38%. And the share of the United States in the inflow, on the  contrary, increased in y-o-y terms from 14% to 21%, while decreasing  in the outflow from 21% to 12%.


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