Think-Tank: First Quarter Say Significant Decrease of Remittances

By the end of 2015, remittances to Georgia are expected to decline by $330 million, reports the local independent think-tank PMCG in its Economic Outlook and Indicators report adding that considering the exchange rate and a multiplier effect, this will represent nominal GDP (GEL) reduction of no more than 1%.

The organization states that in the first quarter of 2015, 72% of the GDP come from remittances. The top five countries that transfer money are Russia (37%), Greece (16%), Italy (10%), the US (9%) and Turkey (7%), “which does not give the grounds of optimism [as] Greece and Russia have an economic crisis, while Italy sees a slight economic growth.”

The report notes that the remittances during the January - May period decreased by 23.2% compared to the same period of last year. Looking at specific countries, transfers from Russia reduced by 42.4%, while remittances from Greece and Italy dropped by 18.1% and 11.6% respectfully. 　

“According to the conservative viewpoint, if remittances maintain this current trend, the volume of 2015 remittances will be reduced by $40 million from Greece and by $290 million from Russia compared to last year,” reads the report.

However, there were some positive trends amid the overall reduction as remittances from the US increased by 26.2% while transfers from Turkey rose by 21.9%.

Baia Dzagnidze