Data from the Armenian Central Bank shows that local commercial banks processed a total of $1.27 billion in incoming remittances from individuals in January-May 2022, up by 70 percent year on year.
Cash inflows from Russia accounted for three-quarters of this gain. They more than doubled in absolute terms, totaling almost $680 million during the five-month period.
By comparison, remittances from the United States rose by 21 percent to about $257 million.
Thousands and possibly tens of thousands of Russian nationals, many of them tech professionals, relocated to Armenia following the outbreak of the war in Ukraine on February 24. An even larger number of Russians is thought to have opened Armenian bank accounts.
The South Caucasus state also receives multimillion-dollar remittances from hundreds of thousands of its own citizens working in Russia. The Russian ruble is now stronger against the U.S. dollar than it was before the war despite crippling Western sanctions imposed on Moscow.
The Armenian dram has similarly strengthened by 15 percent against the dollar and 29 percent against the euro since February 24.
Gevorg Papoyan, the pro-government chairman of the Armenian parliament committee on economic issues, claimed on Wednesday that the soaring remittances to the country are the result of government policies.
“Our economic policy of attracting investors and protecting their rights, maintaining financial stability and ensuring fair competition has been a success,” he said.
Tadevos Avetisian, an opposition lawmaker and economist, dismissed the claim, linking the increased cash inflows to economic consequences of the Ukraine war.
“These ‘hot money’ inflows will fall as quickly as they have increased if this accidental factor disappears,” Avetisian told RFE/RL’s Armenian Service. “So pinning big hopes on them or setting ambitious objectives because of them is just wrong.”
Both lawmakers agreed that the sharp rise in remittances is significantly contributing to economic growth in Armenia.
Right after the outbreak of the war, the growth was projected to practically grind to a halt this year given Armenia’s closer economic ties with Russia. But it on the contrary accelerated in the following months.
The Central Bank governor, Martin Galstian, said last month that the Armenian economy is now on course to expand by 4.9 percent.
“This has mainly to do with the presence of foreign visitors in Armenia and the Russian economy’s short-term performance which is not as bad as we expected earlier,” Galstian said.