Remittances to Armenia Rise In 2010

YEREVAN (RFE/RL)–Cash remittances sent home by scores of Armenians working abroad have increased this year after a sharp drop in 2009, according to latest official statistics.

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.

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4 Comments

  1. Amb said:

    A concerted effort should be put together, maybe led by Armenia's Ministry of Diaspora, to publicize and spread the idea amongst Armenians in Armenia and abroad to use the remittance money to start small business ventures. That way individuals can generate income and eventually live off of that income, and help the economy of Armenia in more fundamental ways than in merely consumer spending ways, which is a flaky and unstable way of building an economy. And, the people won't be dependent on outside remittance payments but be independent and self-supporting and self-sufficient.

  2. Pingback: Remittances to Armenia Rise In 2010 | Asbarez Armenian News | armeniatoday

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  4. rzk said:

    Hey amb, you are right about that. Perhaps the diaspora could start somekind of an investment bank. This by creating equity through selling special bonds to armenians abroad. Say for about 1000 dollar, or euro's here in the netherlands. Putting this kind of bonds into the market is easier to buy for small families, because 1000 dollars shouldnt be a too great of a burden, multiplying this with a 100000 bonds? Would create one hunderd million dollars, a great start. Hell even I as an economy student can put away 1000 dollars.

    greetings from the netherlands

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