Remittance flows to Tajikistan this year drop 7.0 percent compared to 2019, says Tajik central bank
6 months ago Web Desk 0
As of December 20, the decline in remittance flows to Tajikistan compared to 2019 amounted to 7.0 percent, according to the National Bank of Tajikistan (NBT).
According to Tajik central bank, the process of the drop in remittance flows to Tajikistan began in March due to the coronavirus crisis.
The pandemic has led to quarantine, closure of borders, decline in oil prices and fall in the exchange rate of the national currencies in major trading partners of Tajikistan – Russia, Kazakhstan, Turkey and Uzbekistan, the NBT says.
Over the first six months of this year, the remittance flows to Tajikistan have reportedly declined 14.8 percent.
Meanwhile the Central Bank of Russia says that over the first nine months of this year, personal remittances to Tajikistan have dropped nearly 37 percent compared to the same period last year.
Over the reporting period, US$1.224 billion were reportedly sent to Tajikistan from Russia through money transfer systems.
Labor migrants are a critical component in the economy of Tajikistan as remittances keep many struggling families at home above the poverty line.
Tajik seasonal workers travel abroad each year, primarily to Russia but also to neighboring Kazakhstan, Kyrgyzstan and Uzbekistan.
According to the Asian Development Bank, migrant families use an overwhelming portion of remittances (94%) for private consumption, which is the most important component of GDP. However, remittances are rarely used for investments or to save for future contingencies, leaving migrants continually dependent on overseas employment for livelihood.
ADB notes that remittances from labor migrants are equivalent to about a third of the country’s gross domestic product (GDP). The World Bank says remittances from labor migrants last year were equivalent to 28.6 percent of GDP.
Source: Asia Plus