Drop in remittances hurting Central Asian economies, warns EBRD

Remittances to Central Asia, Eastern Europe and the Caucasus have fallen to 2009 levels, and are impeding the growth rates of Central Asian economies, the EBRD warned last week in its latest regional economic prospects report. “Deep recession in the Russian economy, which we now project to contract by 4.5 per cent in 2015, is having larger-than expected negative spill-over effects on countries that have strong economic links with Russia,” it states. 
The EBRD calls the rate at which remittances from Russia are falling “alarming,” and has scaled back its forecasts for economic growth in Central Asian states, including Mongolia, partially as a result of this drop.  EBRD data from the first quarter of 2015 suggests that remittances are falling at rates equal to or faster than those during the global economic crisis in 2009, with the trends predicted to continue through the rest of the year. 
The decline in remittances is due to a combination of the weakness of the  rouble and the return of significant numbers of migrants to their home countries, the EBRD report says, including the hundreds of thousands of migrants reported to have returned to Tajikistan, Uzbekistan and Kyrgyzstan.
Tajikistan is consistently rated the world’s most remittance-dependent country, with 49% of its GDP estimated to come from remittances, primarily from Russia, where nearly half of its men of working age travel to labour, according to Eurasia.net. Kyrgyzstan, the world’s second most remittance-dependent country, is estimated to rely on remittances for about a third of its economy. Kyrgyz workers may also be returning home from Kazakhstan, the EBRD reports, because of Kazakhstan’s slowing growth.