Azernews.Az

By Mushvig Mehdiyev

The inflow of private remittances from Russia to Armenia has decreased drastically. The latest amount of the total money transfers into the country was $959.2 million, declining by 3.9 percent.

Private remittances sent from Russia to Armenia via banking system dropped by 2.2 percent in the first nine months of this year compared to the same period last year, said the Central Bank.

The money transfers from Russia by Armenian migrant workers take a considerable share in the South Caucasus country's income. Nearly 84 percent of the private remittances is sent by the workers in Russia. It makes up roughly 15.4 percent or $1.6 billion of Armenia's Gross Domestic Product.

The sharp decrease in the amount of remittances from Russia is linked to the potent devaluation of the ruble. The value of Russia's national currency dropped by 30 percent since September, promising inevitable hassles in many industrial and economic fields. Western sanctions have almost hit the longer tally of Russian businesses. It eventually lead to a slowdown in its economy, lowering the income of the employees in numerous spheres.

The drop in the private money transfers was observed for four consecutive months with the threatening trend firstly noticed in June when the remittances from Russia fell by 4.6 percent. It surged to 6.6 percent in July, and reached 7.7 percent later in August. The figure decreased to 7 percent in September due to the opening of a comparatively active working season. But the Central Bank assessed it as a negative progress in money transfers.

The World Bank recorded a free fall of the Russian ruble in November after a large depreciation in October, saying it is a growing risk for the stability of the country's economy.

Instable economy in Russia means shaky economy in Armenia given the strong dependence of the country on Russian markets. Any collapse in certain economic fields will decrease the inflow of remittances and create challenges for exporters. It will also weaken purchasing power of the Armenians.

Armenian people are worried about the upcoming disastrous days. Remittances from the overseas are the only source of income for many families in the post-Soviet country. Decrease in money transfers will definitely fuel poverty in Armenia.

The National Statistical Service's recent report revealed a 32 percent poverty rate in the country, while the Central Bank's latest data showed a 3.9 percent decrease in remittances. The fall in remittances is inversely proportional to rise in poverty in Armenia. This simple and short study can prove the vital importance of money transfers for Armenians, who has lost their hope for a better future and gaze at the pocket of their relatives abroad.