In terms of remittance, Armenia is one of three leading countries in Europe and Central Asia
Armenia is one of the three leading countries in Europe and Central Asia in terms of remittance sent home by labor migrants, according to the World Bank’s latest Regional Economic Update on Migration and Mobility in Europe and Central Asia.
The WB update claims that remittance account for 13.9% of Armenia’s gross domestic product (GDP).
As stated by Armenia’s National Statistical Service, private remittance sent to Armenia through banks for non-commercial purposes exceeded $1 billion in the first 8 months of this year, which was $160 million, or 17.5% more than in the same period last year.
In 2016 a total of $1.532.8 billion were remitted to Armenia (a 6% decrease from the previous year), and $816.9 million were remitted from Armenia to other countries (an increase of 7.3%).
The leading countries in the region in terms of remittance are Kyrgyzstan (37.1%) and Tajikistan (28%). In Georgia remittance account for 12% of GDP, the country is followed by Montenegro (9.6%), Serbia (9%), Albania (8.7%), Ukraine (7.2%), Uzbekistan (3.9%) and Bulgaria (3.6%).
The World Bank says remittance flows in the region are relatively high. They have a moderately positive impact on long-term economic growth in the poorest households, and can improve access to international capital markets. The return of migrants to their homelands can support economic development, especially when they bring capital and knowledge, according to the update.
At the same time, WB experts warn that in the long term perspective, dependence on remittance can reduce macroeconomic stability and competitiveness of the region. To address these problems, countries should implement reforms aimed at developing the financial sector and deregulating the commodity and labor markets.