How Will the War in Ukraine Affect Central Asian Remittances?
In 2022, Central Asia was supposed to see slight growth in remittances. Thanks to Russia’s war in Ukraine, remittances are expected to drop dramatically instead.
By Catherine Putz, March 08, 2022
Remittance flows to Central Asia are likely to be severely affected by the Russian invasion of Ukraine, and the subsequent sanctions on Russia, as a recent article by a pair of World Bank analysts makes clear.
In a March 4 article, Dilip Ratha, lead economist for migration and remittances and head of KNOMAD, and financial analyst Eung Ju Kim write that based on initial assessments of the decline of economic activity in Russia and the weakening of the ruble, remittances to Central Asia are now expected to decline by 25 percent.
Original projections of growth in remittances for 2022 — the great promise of recovery after the worst of the COVID-19 pandemic — have been replaced with declines. The most remittance-dependent country in the region at present is Kyrgyzstan. Remittance flows to the country in 2020 amounted to 31.3 percent of GDP. More than 80 percent of remittances sent to Kyrgyzstan come from Russia. Originally the World Bank forecasted that remittances would grow by 3 percent in 2022; that estimate has now been adjusted to a devastating decline of 33 percent. Uzbekistan and Tajikistan are similarly expected to see severe declines of 21 and 22 percent, respectively, instead of growth.
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