Multifold increase of transfers from Russia to Armenia was accompanied by sharp increase in their outflow from Armenia to U.S.

ArmInfo. The multifold increase in the inflow of private transfers from Russia to Armenia was accompanied by a sharp increase in their outflow from Armenia to the United States. Thus, in January-February 2023, the inflow of remittances from Russia compared to the same period in 2022increased 7.2-fold, and their outflow to the United States - by 56.4%, and in both cases a significant acceleration of upward rates was recorded from last year's 35 .1% and 15.7%, respectively, in terms of inflow from Russia and outflow to the United States. This is evidenced by the data of the Central Bank of the Republic of Armenia.

As a result, the net inflow of private transfers to Armenia, due to a significant increase in receipts from Russia, increased 5.2-fold year-on-year (from 52.7% growth a year earlier), amounting to 12.5% in January-February this year. Moreover, the net inflow of private transfers from Russia increased 12-fold year-on-year (from last year's 50.3%), reaching $819.3 million, while the net inflow of transfers from the United States reversed from 12% growth towards 37.5% decline, amounting to $29.3 million.

In particular, the multifold increase in the inflow of transfers from Russia to Armenia up to $882.2 million was accompanied by a noticeable slowdown in the upward pace of the outflow of transfers from Armenia to the Russian Federation - from 22% to 5.6%, the volume of which amounted to $62.9 million. At the same time, in the direction of the United States : a slowdown in inflow growth from 13.6% to 2.8% - to $84.3 million was accompanied by an increase  in outflow to $55 million.

In total, the inflow of transfers from individuals to Armenia accelerated y-o-y growth from 25.1% to 3.6- fold, while the growth of the outflow of transfers accelerated from 15.6% to 2.8-fold, the volumes of which in January-February 2023 amounted to $1.1 billion and $597.7 million, respectively.

The share of Russia in the inflow in y-o-y terms increased from 40% to 80.2%, while decreasing in the outflow from 28.1% to 10.5%, while in the pre-Covid period, ,Russia's share in both inflow and outflow was at the level of 48%. And the share of the United States decreased in y-o-y terms both in inflow - from 26.6% to 7.7%, and in outflow - from 16.6% to 9.2%, being below the pre-covid levels of 13.8% and 16.1% in January-February 2019.

In February 2023 alone, t the net inflow of remittances to Armenia increased by 95.1% from the 43.6% decrease in January, as a result of the same reversal of the dynamics of inflow and outflow from 34.7- 25.3% decline to 85-75% growth. In particular, the inflow of transfers from Russia increased 2.1-fold (from the January 33.5% decline), which has also been observed in a much more modest form for inflows from the US with a 9.2% increase in February from a 36.5% decline in January.

At the same time, in terms of outflows in these directions, the February dynamics were multifaceted. In particular, the outflow of remittances to Russia increased by 32.6% from a 55.3% decline in January, while the outflow of remittances to the US only slowed down from 26.2% to 14.6% during the reporting month.  As a result, the net inflow from Russia increased 2.2-fold in February from the 30% decline in January, which was also observed for the net inflow from the United States - with an increase to 76% from a 54.3% decline in February. As a comparison, we note that in February 2022, the growth in inflow from Russia was almost the same - 2-fold, accompanied by a 57.7% increase in outflow there, while a stagnant 0.7% increase in inflows towards the US was accompanied by a surge in outflows there by 65.7%, resulting in a 2.6-fold increase in net inflows from Russia, while net inflows from the US dropped by 30.5% .

According to experts, immigrants played a decisive role in such an increase in private transfers, most of whom settled in Armenia after the beginning of the Russian-Ukrainian war (in February 2022) and then with the announcement of mobilization in the Russian Federation (in September 2022).

They moved to Armenia, moving their capital and business here.  According to the authorities, for 10 months of 2022 (March-December), 108-110 thousand Russians moved to Armenia (for permanent residence), 2.5 thousand legal entities and 4 thousand individual entrepreneurs with Russian participation were registered. According to the expectations of international financial organizations, a significant part of new immigrants will stay in Armenia for at least 2-3 years, but it is worth paying attention to the warning about the increasing impact of geopolitical risks.