The nearly 5 percent year-on-year increase recorded by the Central Bank of Armenia (CBA) in January and February bodes well for the country’s continued economic recovery.
CBA data put the total amount on non-commercial cash transfers to Armenia through the banking system at $119 million, up from $113.5 million reported in January-February 2009. The figure is equivalent to 14 percent of Gross Domestic Product, highlighting their importance for the Armenian economy.
Still, overall incoming individual transfers were down by 6.6 percent at $158.2 million. The sum includes funding for business transactions carried out in Armenia.
Non-commercial remittances tumbled by over 31 percent to $1.12 billion last year as a result of the global financial crisis. That was one of the reasons why Armenia was hit particularly hard by the recession.
Its GDP contracted by as much as 14.4 percent in 2009 after a decade of robust growth. Armenian growth resumed in the first quarter of 2010 as economic conditions around the world and Russia in particular began improving.
Russia, which is home to hundreds of thousands of Armenian migrant workers, remained the number one source of the remittances during the two-month period, accounting for almost 76 percent of the total reported by the CBA. Rising international prices of oil and other key commodities, on which the Russian economy is heavily dependent, should boost the hard-currency inflows further in the coming months.