ArmInfo. The net inflow of private transfers to Armenia for 9 months of 2023 dropped to $1.3 billion from $1.7 a year earlier. According to the data of the Central Bank of RA, the y-o-y dynamics of this indicator turned sharply from a 2.6-fold increase to a 23% decrease.
The decrease in volumes is caused by the deterioration of the dynamics of inflow of transfers, maintaining a high level of outflow. In particular, in terms of inflow of remittances, its growth slowed down from Russia, decreased from the USA, and in terms of outflow, it significantly accelerated both in the direction of Russia and the USA.
Thus, the influx of transfers from Russia to Armenia in Jan-Sept2023 sharply slowed down in y-o-ygrowth from 3.7 -fold to 30%, along with which the growth of the outflow of transfers from Armenia to Russia significantly accelerated - from 7.4% to 71%. As a result, the y-o-y growth of the net inflow of transfers from Russia sharply slowed down -from 5.8-fold to 23%. Consequently, the volume of inflow of transfers from Russia for 9 months of 2023 amounted to $3 billion, and the outflow to the Russian Federation - $504.6 million, which formed a net inflow in this direction at the level of $2.5 billion.
At the same time, the influx of transfers to Armenia from the USA in Jan-Sept 2023, worsening in y-o-y dynamics from 18.2% growth to 2% decline, amounted to $483.7 million, along with which the outflow of transfers from Armenia to the USA continues to grow high with an acceleration of the pace from 38% to 54%, amounting to $324.1 million. As a result the y-o-y dynamics of the net inflow of transfers from the United States worsened - from a 1.5% increase to a 43% decline, the volume of which dropped to $159.6 million.
In total, the influx of private transfers to Armenia, having sharply slowed down in y-o-y growth from 2.3- fold to 23%, amounted to $4.3 billion in Jan-Sept 2023. . In parallel with this, the upward trend in the outflow of transfers slowed down more modestly - from 2-fold to 69%, providing a volume of $2.9 billion. This caused a decline in the net inflow of transfers, which showed a multiple growth just a year ago. As a result, Russia's share in inflows increased over the year from 67% to 70%, while slightly decreasing in outflows - from 18% to 17%. The US share of both inflows and outflows fell by 11% each from last year's 14% and 12%, respectively.
The Central Bank of Armenia in its updated September forecast for 2023 forecasts a more noticeable decline in the net inflow of private transfers, due to the impact of the slowdown in economic activity in Armenia's trading partner countries, as well as a reduction in remittances in dollar terms due to the sharp devaluation of the Russian ruble from July this year. According to new forecasts of the Central Bank of the Republic of Armenia, the ratio of private transfers to GDP will decrease to 3.9% in 2023 (from 8.3% in 2022), and then decrease y-o-y - to 3.2% in 2025, which indicates the duration of the weakening of the economic effect in terms of the impact of transfers on the economy. In the same forecast report, the Central Bank improved expectations for 2023 for Armenia's GDP growth from the previous 6.9% to an updated 7.2% (against actual growth of 12.6% in 2022), while forecasting a slowdown in growth rates of up to 5.6% for 2024.
As a comparison, we note that in 2022, the influx of private transfers accelerated in y-o-y growth from 14.5% to 2.5-fold (4.2-fold- from Russia ), reaching a record $5.2 billion. The same change in y-o-y dynamics was observed in outflow of transfers - from a 3.3% decline towards an increase of 2.1-fold (by 74% -to the USA), and also to a record $2.6 billion. As a result, the net inflow of remittances from individuals sharply accelerated in growth from 53.8% up to 3-fold, reaching a historical maximum of $2.6 billion. The increase in transfers from Russia was due to the influx of a huge number of immigrants from the Russian Federation to Armenia, who moved here along with their businesses and capital. Moreover, this move to Armenia of over 100 thousand immigrants took place in two impressive flows - from the end of February 2022 (with the outbreak of Russia's war against Ukraine) and in September of the same year (with the announcement of mobilization in the Russian Federation), since in their homeland they faced difficulties with work, financial and card transactions due to unprecedented large-scale anti-Russian sanctions (including disconnection from the S.W.I.F.T. system, withdrawal from the Visa and MasterCard market, blocking of Western social networks)
