After growing sharply by 18 percent in 2022, remittance flows to Europe and Central Asia declined by 10 percent to reach about $71 billion in 2023. The World Bank’s latest Migration and Development Brief says.
As noted, the sharp decrease in remittances in 2023, from the high 2022 base, was driven mainly by a slowdown of money transfers from the Russian Federation to its neighboring countries, especially to Central Asian economies. Depreciation of the ruble against the dollar, which reached 39 percent by the end of 2023, a decrease in the number of remittances from Russia to Ukraine and a slowdown in the outflow of migrants from Russia to neighboring countries, as some of them decided to return home, also played a role.
Moreover, financial institutions in some destination countries have restricted transfers from Russia over concerns of additional sanctions. These factors, according to analysts, may have diverted remittance flows to informal channels.
According to the World Bank’s estimates, last year remittance flows from Russia to Uzbekistan decreased, where the share of remittances from Russia in the structure of all remittances fell from 87 to 78 percent, as well as to Georgia (from 47 to 37 percent), Azerbaijan (from 82 to 63 percent), and Kyrgyzstan (from 95 to 94 percent). As emphasized, remittances from the U.S. to these economies have also declined significantly.
«Many other countries in the region experienced sharp declines: Armenia, Azerbaijan, and Kazakhstan posted at least a 29 percent drop in 2023. In contrast, remittances to Albania, Bulgaria, Kosovo, and Turkey posted double-digit growth in 2023,» the document says.
According to the World Bank forecast, remittance flows to Europe and Central Asia are projected to decline by 2 percent in 2024 due to normalization of outward remittances from Russia to its neighboring countries and lingering weakness in flows to Ukraine and Russia. For 2025, it is forecasted that remittances to the region will grow by about 4 percent to reach about $72 billion.
The average cost of sending $200 to Europe and Central Asia climbed by 26 basis points to 6.7 percent in the fourth quarter of 2023 from 6.4 percent a year earlier.
