Cash remittances wired home by scores of Armenians working abroad fell by 36 percent to just under $600 million in the first half of this year, adding to the country’s worst economic downturn since the early 1990s.
The sharp drop reported by the Central Bank of Armenia (CBA) on Tuesday is one of the reasons why the Armenian economy contracted by 16.3 percent during this period. It resulted from the ongoing recession in Russia and other countries with large numbers of Armenian migrant workers.
The total amount of cash inflows processed by Armenian commercial banks and wire transfer systems was equivalent to 18.4 percent of first-half Gross Domestic Product (GDP), reflecting their significance the economy.
The remittances had risen rapidly until the outbreak of the global financial crisis last fall that put an end to a decade of robust economic growth in Armenia. They were up by as much as 57.5 percent year on year in the first half of 2008 when GDP was on track to increase at a double digit rate for a seventh consecutive year.
Worsening economic conditions around the world and Russia in particular have since slashed migrant workers’ financial assistance to their families. Also, many Armenians, most of them living in rural areas, could not travel to Russia for seasonal work this year for the same reason.
The CBA data, made available to RFE/RL, also show that the shortfall in remittances was mitigated by an even more drastic slump in first-half outflows of cash from Armenia. They tumbled by 53 percent year on year to $259 million. The resulting net hard-currency inflow was down by only 11.8 percent.
The total amount of cash inflows processed by Armenian commercial banks and wire transfer systems was equivalent to 18.4 percent of first-half Gross Domestic Product (GDP), reflecting their significance the economy.
The remittances had risen rapidly until the outbreak of the global financial crisis last fall that put an end to a decade of robust economic growth in Armenia. They were up by as much as 57.5 percent year on year in the first half of 2008 when GDP was on track to increase at a double digit rate for a seventh consecutive year.
Worsening economic conditions around the world and Russia in particular have since slashed migrant workers’ financial assistance to their families. Also, many Armenians, most of them living in rural areas, could not travel to Russia for seasonal work this year for the same reason.
The CBA data, made available to RFE/RL, also show that the shortfall in remittances was mitigated by an even more drastic slump in first-half outflows of cash from Armenia. They tumbled by 53 percent year on year to $259 million. The resulting net hard-currency inflow was down by only 11.8 percent.