Money transfers to Azerbaijan drop 31% as inflows from Russia decline

Money transfers to Azerbaijan through instant payment systems fell by 31.2% year-on-year in the first quarter of 2024, totaling 465.2 million manats, the Central Bank of Azerbaijan reported.

Outflows from Azerbaijan abroad also dropped, falling 36.8% to 174.8 million manats.

The sharp decline in remittances is primarily attributed to reduced financial flows from Russia. Following the start of the war in Ukraine in 2022, remittances to Azerbaijan surged as migrants sought to transfer savings out of Russia amid sanctions and economic uncertainty. Much of this money was used to purchase property, fueling a sharp rise in real estate prices, particularly in Baku.

However, remittances began to fall in 2023 and have now dropped below pre-war levels. Transfers from Russia totaled 1.047 billion manats in 2023 but just 496.8 million in 2024.

The downward trend is expected to continue, driven by declining economic activity in Russia and lower incomes among Azerbaijani migrant workers.

N.Tebrizli