BAKU, Azerbaijan, April 8. Georgia should expect a much stronger decrease in money transfers from Russia in March 2022 amid the crisis due to the hostilities between Russia and Ukraine, the ISET Policy Institute (ISET-PI), Georgia’s independent economic policy think-tank, told Trend.
According to the National Bank of Georgia (NBG), the remittances from Russia to Georgia already decreased by 14.6 percent in February 2022, compared to the same period of 2021 - from $25.1 million to $21.9 million. Meanwhile, Russia has been among the top countries of origin for money inflow to Georgia for a long time.
According to the economists of the institute, there are several reasons for that. First of all, many international companies have left Russia, consequently raising the unemployment rate, and even those who still have a job would have to work for a much lower salary. In addition to that, product prices’ increase in Russia will also lead to fewer funds left for money transfers.
Another reason is the Ruble’s depreciation against other currencies, which would automatically mean that Georgia gets less volume of remittances in terms of Georgian lari, the ISET-PI said.
“So far Russian ruble lost only 4 percent of its value against the Georgian lari since the beginning of February. However, in the long run, this value may not be sustainable considering the sanctions. The current ruble strength is driven by tight capital controls and restrictions imposed by the Russian Central Bank,” the institute noted.
In the long run, remittances volumes are most likely will remain low and keep falling as a share of overall remittances to Georgia, the ISET-PI said.
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