The COVID-19 pandemic and the slump in commodity prices will affect the inflow of remittances to Georgia as some of the key remittances sending countries such as Italy, Russia, the United States, have been strongly impacted, says the World Bank.
Remittances are an important source of income for households in Georgia and the COVID-19 shock will reduce these inflows. It will be important to ensure that these vulnerable groups are covered by the government’s crisis-response measures while working to further reduce the costs and time required to receive remittances," said World Bank Regional Director for the South Caucasus, Sebastian Molineus.
Russia, Italy and Greece were the largest remittance senders in Georgia in March 2020, according to the National Bank of Georgia.
Georgia received $25.39 million from Russia, $17.31 million from Italy and $16.24 million from Greece.
Overall, Georgia received $125.9 million from abroad last month, which is 9 per cent less than the amount in March 2019.
Remittances have been growing in Georgia since 2016 and exceeded 10 per cent of gross domestic product (GDP) in recent years, reflecting stronger inflows from the European Union and Israel. Transfers from abroad are an important source of income for Georgian citizens, with almost 20 per cent of households reporting receiving money from relatives living abroad in 2019, says the World Bank.
Remittances are a vital source of income for developing countries. The ongoing economic recession caused by COVID-19 is taking a severe toll on the ability to send money home and makes it all the more vital that we shorten the time to recovery for advanced economies. Remittances help families afford food, healthcare, and basic needs. We are working to keep remittance channels open and safeguard the poorest communities’ access to these most basic needs", said World Bank Group President David Malpass.
The World Bank says that global remittances are projected to decline sharply by about 20 per cent in 2020 due to the economic crisis induced by the COVID-19 pandemic and shutdown.