Friday, May 13 2022 16:47
Alina Hovhannisyan

UBA: Net inflow of private transfers to Armenia increased by 45% per  annum in Q1

UBA: Net inflow of private transfers to Armenia increased by 45% per  annum in Q1

ArmInfo.In Q1 2022, the inflow of transfers from individuals to Armenia increased by 38.2% per annum or by $155 million, reaching $561 million, Deputy Executive Director  of the Union of Banks of Armenia Arman Sargsyan said during a press  conference on May 13.

At the same time, the lion's share traditionally falls on the Russian  market (42.6%), followed by the United States (25.5%). Very small  volumes of transfers come from France, Germany, Kazakhstan, UAE,  Ukraine, Spain, China.

The outflow of remittances from Armenia increased by 35% or $97  million in y-o-y terms, amounting to $374 million. Moreover,  transfers were mainly directed to Russia (33.2%) and the USA (16.3%),  as well as to the UAE (6.4%), China (4%), Germany (2.9%), and to a  lesser extent to France, Spain, Ukraine, Kazakhstan.  As a result,  the net inflow of transfers, having increased by 45% or $58 million  year-on-year, reached $187 million in Q1 2022.

In Q1 2021, both the inflow and outflow of private transfers also  showed growth, but much more modest - 14.7% and 4% per annum,  respectively, as a result of which the net inflow has registered a  48% increase.  The share of Russia in the inflow then decreased to  38% (from 46.5% a year earlier), while the United States, on the  contrary, increased to 29.1% (from 17.8% a year earlier), which was  also observed in the outflow - a decrease in the share of Russia to  31.1% with an increase in the US share to 16% from 32.6% and 13%,  respectively, a year earlier.  According to the March forecast of the  Central Bank of the Republic of Armenia for 2022, the net inflow of  remittances in dollar terms will decrease by 20% to 6.7% of GDP.  It  should be noted that the Armenian economy is gradually reducing its  high dependence on the "transfer needle". According to the analysts  of AmRating CRA, in the current conditions of aggravation of the  external background and sanctions against the Russian Federation, a  possible reduction in remittances from Russia will have little effect  on the decline in domestic demand due to the structure of transfers  that has changed in recent years. Thus, over the past few years, the  share of transfers in the formation of the country's GDP has  decreased from 14% to 8.9% by 2022. The geographical structure of  private transfers has also changed: the share of transfers from  Russia in the total volume has decreased in recent years from 75% to  41% by 2022.

At the same time, as the agency's analysts noted, the reduction in  private transfers can be fully compensated not by the seasonal, as it  was before, but by the constant, all-season, significant increase in  "immigration" and tourist flow to the country, including from Russia,  citizens of which, due to Western sanctions, will be limited in the  choice of inexpensive places for recreation and remote work, one of  the comfortable destinations of which is Armenia.

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