Remittances to war-hit Ukraine seen rising 20% to record high

Remittances to war-ravaged Ukraine are forecast to jump by over 20% this year to a record, even as those to fellow former Soviet republics in Central Asia will likely fall “dramatically” given Russia is their main source.

The decline in remittances to Central Asia, combined with rising food, fertilizer and oil prices, is likely to increase risks to food security and exacerbate poverty in many of those countries, according to a World Bank report released Wednesday. 

Tetiana Chernenko, 50, walks through her damaged property, on May 10, 2022 in Sloboda-Kukharivska, Ukraine.

Alexey Furman/Photographer: Alexey Furman/Gett

“The Russian invasion of Ukraine has triggered large-scale humanitarian, migration and refugee crises and risks for a global economy that is still dealing with the impact of the COVID pandemic,” said Michal Rutkowski, a director at the World Bank. 

Russia, which invaded Ukraine nearly 11 weeks ago, has reoriented its operations to the eastern Donbass region and is focused on cementing both military and political control over the territory it has taken. In response, the U.S. and U.K. have announced bans on Russia oil imports.

Remittance inflows to Europe and Central Asia increased by 7.8% in 2021 to a historic highs of $74 billion, driven by a stronger European Union economy and rebounding energy prices. Of that, Ukraine received $18.2 billion, driven by receipts from Poland — the largest destination country for Ukrainian migrant workers.

Ukraine is the largest recipient of remittances in Europe and Central Asia.

Near-term projections for remittances to Central Asia, which are expected to slip 1.6% in 2022, are uncertain, dependent on the scale of the war in Ukraine and the sanctions on outbound payments from Russia.

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