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Remittances from Russia to Georgia Likely to be Reduced

Remittances from Russia to Georgia might reduce. The International Monetary Fund’s (IMF) representative Natalia Tamiris makes this assumption. Consequently, the social status of the families that are wholly or partly dependent on aid from relatives living in Russia will significantly worsen.

Geopolitical tension, the Ukrainian crisis and economic sanctions inhibit the development of economy not only in Russia but also in the Caucasus and Central Asia,  because these economies are closely interconnected – Tamiris thinks and says  that if Russia’s economic growth delay continues, the remittance flow, which people living in Russia send to their family members and relatives, will  significantly reduce.

She predicts that economic growth in the Caucasian and Central Asian countries may hinder, and if it amounted to 7% in 2013, in 2014-2015 will not exceed 5.5%.

“The reason is the reduction in the growth of the Russian economy, geopolitical risks growth and low consumer demand,” – the representative of the International Monetary Fund says.

As of October 2014, in Georgia, the volume of money transfers to Georgia amounted to  USD 123.9 million or GEL 217.3 million, which is USD 8.7 million ( GEL 15.2 million) or 6.5 percent less than the same figure for October 2013. At the same time, 50.2 percent or  USD 62.2 million accounts for remittances from Russia in October 2014. A year earlier the figure was 55.3 percent. It is followed by Greece (12.8%), Italy (7.7), the USA  (5.9) and other countries.

According to the economist Irakli Lekvinadze, currently in Russia there is a rather difficult economic situation and  we should expect its further deterioration that  will certainly affect the financial position of the Georgians living in Russia. Respectively, remittances from this country will reduce.

“60% of transfers to Georgia account for Russia and Ukraine, and this figure will definitely reduce. Although, it is possible that the decline of this indicator will be balanced by  transfers from Europe and Turkey, which are steadily growing, “- the expert adds.