bne:Chart – From Russia with pain

By bne IntelliNews April 17, 2015

Henry Kirby in London -


Former Soviet states bordering Russia are suffering as the continued economic pressure on the country causes remittances by migrant workers to fall, according to data released by the Central Bank of Russia (CBR).

As the bne:Chart shows, a clear correlation exists between the performance of the Russian economy in GDP terms and the volume of cross-border remittances going from Russia to the former Soviet nations.

The CBR data details all cross-border money transactions executed in 2007-2014 by non-residents in Russia, often labour migrants from bordering nations.

The volume of remittances largely mimics the performance of Russia’s annual GDP, with a fall in volume just after the 2008 crisis and another in 2014, when the economy fell victim to a combination of a sharp ruble depreciation, low oil prices and punitive Western-led sanctions.

While the data does not account for the physical transit of cash across borders, the expenditure on and then exporting of Russian goods, or for other methods of moving money like the hawala system, it is illustrative of the economic dependence on Russia of its close neighbours.


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