ArmInfo.an. The net inflow of transfers from individuals in January- August 2022 sharply accelerated y-o-y growth from 58.2% to 2.4-fold, reaching $1.4 billion, almost 5-fold higher than the pre-Covid volume of the comparable period in 2019.
To a greater extent, this is supported by a tangible increase in remittances from Russia, in parallel with which the activity of transfers from the United States is rapidly declining. This is evidenced by the data of the Central Bank of the Republic of Armenia.
In particular, the inflow of transfers from Russia to Armenia in January-August 2022 sharply accelerated y- o-y growth from 13.4% to 3.5-fold, along with the 7% growth (from 9.7% decline a year earlier) there was a trend of outflow of transfers from Armenia to the Russian Federation. This sharply accelerated the y-o-y growth of the net inflow of transfers from Russia from 45.4% to 5.5-fold. As a result, the volume of inflow of transfers from Russia in January-August 2022 reached $1.9 billion, and the outflow to the Russian Federation - $271.5 million, which formed a net inflow in this direction at the level of $1.6 billion. But on a monthly terms, both in July and in August, the inflow of transfers from Russia continued to decline, accelerating from 2.1% to 26%, while the dynamics of the outflow, on the contrary, recovered from the July 14.9% decline to the August 14.2% growth, which delayed the net inflow in recession with an acceleration of rates from 1.1% to 28.6%. At the same time, the inflow of transfers of individuals to Armenia from the United States in January-August 2022 sharply slowed down growth from 52% to 19%, amounting to $433.8 million, along with which the upward trend of the outflow of transfers from Armenia to the United States slowed down less noticeably from 44.7% to 40.4%, amounting to $174.04 million. As a result, the y-o-y growth of the net inflow of transfers from individuals from the USA slowed down significantly - from 56% to 8%, amounting to $259.7 million, which was also observed in the dynamics of the outflow of transfers to the United States, but at a more noticeable pace - from a 33.1% decline to a 40.3% increase, as a result, the net inflow decreased by 14.4% (against the July 10% growth). In total, the inflow of transfers from individuals to Armenia sharply accelerated y-o-yl growth in January- August 2022 from 23.2% to 2.2-fold, exceeding $2.9 billion. A similar uptrend was observed in the outflow of transfers - from 5.5% to 97%, with a volume of $ 1.5 billion. This allowed the net inflow of transfers to grow significantly.
The share of Russia in the inflow, increased in January-August 2022 from 41% to 65.3% (against 54.2% in January-August 2019), and in the outflow decreased - from 33.3% to 18% (against 27.5% in January- August 2019). And the share of the United States decreased in both cases - from 27.2% to 15 % in inflow (against 14.3% in January-August 2019), and from 16.2% to 11.6% in outflow (against 23% in January- August 2019).
It should be noted that Central Bank of the Republic of Armenia in its forecast for 2022, updated in September, further reduced the decline in the net inflow of transfers. (including income of seasonal workers and private transfers) - to 7% from the previous 13% (against the actual 54% growth in 2021). In its forecast, the Central Bank bases this improvement with the assessment of more positive developments in the Russian economy, projected decline of which has been reduced to 4.2%, from the previously expected 7.4%. The ratio of individuals' transfers to GDP, according to the new forecast of the Central Bank of the Republic of Armenia, will decrease over 2022 from 9.3% to 6.3%, and the further expected y-o-y decline (to 4.2% in 2025) indicates a prolonged weakening of the economic impact of remittances on the economy. In its new forecast, the Central Bank once again improved its expectations for GDP growth for 2022 - from the previous 4.9% to an updated 12.9% (against the actual 5.7% growth in 2021).
However, it would be appropriate to note that in 2022 there has been a surge in transfers from Russia to Armenia, provoked by the massive arrival of Russians along with the movement of their capital. Moreover, on a monthly term, a significant increase in the net inflow of transfers from Russia began to be observed already in February (a 3-fold increase), continuing to grow at a rapid pace in the following months. As a result, Russia's share in inflow increased to 60.5% in H1 2022 from 39.6% in H1 2021 (vs. 51.3% in H1 2019). Such an increase in transfers is explained by the arrival of a huge number of Russians in Armenia who, due to the Russian-Ukrainian conflict and the West's anti-Russian sanctions (including switching off S.W.I.F.T. system, withdrawal from the Visa and MasterCard market, blocking of Western social networks) faced with difficulties in their work, financial and card transactions in their homeland.
