According to Central Bank data, local commercial banks processed a total of $748.4 million in cash transfers from Armenians working abroad, up from $546.2 million in January-May 2020.
Money sent back to family members by migrants living in the United States generated half of this increase, doubling to $212 million in absolute terms. Armenian families received another $290 million from Russia, which remains the largest source of remittances.
Remittance inflows to the country fell by 6 percent to $1.84 billion last year amid the global health crisis that caused the Armenian economy to shrink by 7.6 percent.
The economy began growing again this spring. The rising remittances, which were equivalent to 14 percent of Armenia’s GDP in 2020, are contributing to its ongoing recovery by boosting consumer spending.
Preliminary data from the Armenian government’s Statistical Committee shows the overall volume of wholesale and retail sales in the country rising by 8 percent year on year in January-May 2021.
The sharp increase in remittances appears to have also helped to reverse a 6 percent depreciation in November-December 2020 of the Armenian currency, the dram. The autumn war in Nagorno-Karabakh is thought to have been a major factor behind its weakening.
The dram strengthened against the U.S. dollar by 5.3 percent in the in the first half of this year and by another 3 percent in July.