(MENAFN- AzerNews)
Ulviyya Shahin Read more
Foreign remittances, a crucial component of Azerbaijan'seconomy, have witnessed a significant downturn in the first quarterof 2024. According to data from the Central Bank of Azerbaijan,remittances sent through fast money transfer systems plummeted by31%, marking a concerning trend for the nation's economicstability.
In the period spanning January to March 2024, banks inAzerbaijan received a total of 465.2 mln manat ($273.65mln) throughfast money transfer systems, marking a substantial decline from thecorresponding period in 2023. Concurrently, the volume of fundssent abroad from Azerbaijani banks amounted to 129 mln manats($75.88 mln), representing a decrease of 26.2%.
The magnitude of this decline is underscored by a closerexamination of the figures from the previous year. In the firstquarter of 2023, banks in Azerbaijan received a significantlyhigher sum of 672.8 mln manats ($395.76 mln) through fast moneytransfer systems, with the volume of funds sent abroad totaling174.8 mln manats ($102.82 mln).
Several factors may have contributed to this pronounced declinein foreign remittances. Economic uncertainties, both globally anddomestically, could have influenced the decision-making ofexpatriates, leading to reduced remittance flows. The ongoinggeopolitical developments and changes in migration patterns oremployment opportunities abroad may have also played a role indampening remittance inflows.
The repercussions of this decline in foreign remittances aremultifaceted and could potentially impact various sectors ofAzerbaijan's economy. Remittances play a crucial role in supportinghousehold incomes, promoting consumption, and fostering economicactivity. A decrease in remittance inflows may result in reducedconsumer spending, which could, in turn, affect businesses andoverall economic growth.
Addressing the challenges posed by the decline in foreignremittances requires a concerted effort from policymakers andstakeholders. Strategies aimed at diversifying the economy,reducing dependence on remittance inflows, and promoting domesticsources of growth are imperative. Additionally, initiatives toenhance the resilience of the financial sector and stimulateinvestment in key sectors could help mitigate the adverse effectsof reduced remittance inflows.
As Azerbaijan navigates through this challenging economiclandscape, proactive measures aimed at bolstering economicresilience and fostering sustainable growth are essential. Byimplementing strategic reforms and creating an enabling environmentfor investment and innovation, Azerbaijan can mitigate the impactof declining remittance inflows and chart a course towards economicrecovery and prosperity.
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