Thursday, June 1 2023 14:46

ArmInfo.Money transfers of individuals through banks in Armenia show a significant increase in  inflows from Russia and outflows to the US in January-April 2023. At the same time, the inflow of transfers from the United States began to decline, while the outflow of remittances to Russia shows a moderate increase.

As a result, the net inflow of transfers from  individuals accelerated the y-o-y growth in the reporting period from  75.6% to 2-fold, exceeding $719.7 million. This is evidenced by the  data of the Central Bank of the Republic of Armenia, according to  which the total volume of inflow and outflow increased several times  over the year, but the outflow is more significant , whereas a year  earlier there was a more restrained pace with  inflows as a stimulus  and again due to high growth in inflows from Russia and  outflows to  the United States.

Thus, the inflow of transfers of individuals to Armenia from Russia  in January-April 2023 accelerated the y-o-y growth from 90% to  3.7-fold, which was also observed at a much more restrained pace in  the outflow of transfers from Armenia to the Russian Federation -  from 19.3% to 28.4 %. This spurred the upward trend in the net inflow  of transfers from Russia up to 5-fold in January-April 2023 from  2.8-fold in January-April 2022. As a result, the volume of inflow of  transfers from Russia in January-April 2023 amounted to $1.5 billion,  and the outflow to the Russian Federation - $185.6 million, which  formed a net inflow in this direction at the level of $1.4 billion.

At the same time, the y-o-y dynamics of the inflow of transfers of  individuals to Armenia from the United States in January-April 2023  registered a 3.2% decrease from a 20% increase, amounting to $192.8  million, along with which the growth of the outflow of transfers from  Armenia to the United States significantly accelerated - from 47.1%  to 64.5%, exceeding $138 million. As a result, the net inflow of  transfers from individuals from the United States sharply reversed  they-o-y dynamics from 5.8% growth to a 52.4% decline, dropping to  $54.8 million.

In total, the inflow of transfers from individuals to Armenia  accelerated the y-o-y growth in January-April 2023 up to 2.4-fold  from 50% in January-April 2022, exceeding $2 billion. But the growth  rate of the outflow of transfers accelerated more significantly -  from 36% to 2.6-fold, with a volume of over $1.3 billion. As a  result, the y-o-y upward trend in net transfer inflows to Armenia  accelerated.

  Russia's share in inflows increased to 75.6% in January-April 2023  from 48% in January-April 2022 (against 51% in January-April 2019),  decreasing in outflows from 28.7% to 14% (against 38.7% in  January-April 2019). And the share of the United States in the inflow  continued to decline - from 23.1% to 9.4% in y-o-y terms (versus  15.3% in January-April 2019), decreasing in outflows from 16.7% to  10.4% ( against 18.8% in January-April 2019).

In April 2023 alone, the net inflow of transfers to Armenia jumped  2.4-fold, which was the result of a more noticeable decline in  outflow - by 31.4%, rather than inflow - by 4.1%. Moreover, the  decline in inflow was more noticeable to the United States - 16.5%  than to Russia - 3.2%, w while outflows to Russia decreased by 41%,  with outflows to the US increasing by 7.4%.

According to experts, the decisive role of such an increase in  private transfers (meaning y-o-y dynamics) was due to immigrants,  most of whom started to stay in Armenia since the beginning of the  Ukrainian- Russian war (in February 2022) and then with the  mobilization proclamation in the Russian Federation (in September  2022). 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 with Russian  participation were registered and 4 thousand individual  entrepreneurs. According to the expectations of international  financial organizations, a significant part of new immigrants will  remain in Armenia for at least 2-3 years, but it is worth paying  attention to the warning about the increasing impact of geopolitical  risks.