Remittances from abroad to Georgia declined by 19% in 2024 as compared to 2023, amounting to a USD 785 million decrease. The aforementioned drop was primarily influenced by a 65% decline in money transfers from Russia. Whilst Russia has consistently held the top position in remittance inflows to Georgia for decades, it fell to third place in 2024, with the United States and Italy surpassing it.
Russia accounted for 54% of money transfers to Georgia in 2013 and 18% in 2021. Whilst Russia’s share gradually declined each year, it maintained its leading position throughout this period. This decline was mainly influenced by a rise in remittances from other countries rather than a reduction in the amount transferred from Russia. However, the trend reversed in 2022 with money transfers from Russia surging by 400% and its share in total remittances reaching 47%. Subsequently, Russia’s share decreased to 37% in 2023, followed by a further decline to 16% in 2024.
Graph 1: Russia’s Share in Remittances
Source: National Bank of Georgia
The impact of the Russia-Ukraine war and the subsequent partial mobilisation in Russia on remittance flows to Georgia is particularly evident in the quarterly data. Russia’s share in money transfers had declined to 13% in the first quarter of 2022 prior to the conflict. However, its share surged to 55% in the second quarter, further increasing to 60% in the fourth quarter. Notably, the war began in February and the partial mobilisation was announced in September.
Graph 2: Russia’s Share in Remittances by Quarters
Source: National Bank of Georgia
Russia averaged 49% of money transfers to Georgia between April 2022 and July 2023, marking a notable increase as compared to the averages of both the preceding five quarters (17%) and the subsequent six quarters (18%).
The impact of migration appears to have largely diminished. A substantial increase in remittances from Russia is unlikely considering the current downward tendency unless a renewed wave of mobilisation or a significant escalation of the conflict occurs.
The depreciation of RUB also contributed to the decline in money transfers from Russia in the fourth quarter. Whilst the exchange rate averaged RUB 90-93 per USD in September, it had reached RUB 105-110 per USD in November-December. This suggests that RUB 100,000 was equal to USD 1,100 in September and USD 900-950 in November-December. Notably, remittances are calculated in USD.
Whilst remittances from Russia have demonstrated a consistent decline (with 2022 being an exception), transfers from the US have been steadily rising. Despite an increase in the monetary amount of remittances from the US in 2022, their relative share decreased due to the rise in remittances from Russia.
Graph 3: Remittances from the United States (USD Million)
Source: National Bank of Georgia
Remittances from Russia increased by 26%, from USD 429 million to USD 542 million between 2019 and 2024, whilst those from the US grew by 222%, rising from USD 178 million to UDS 573 million during the same period. Furthermore, remittances from the US reached 17.7% in 2024, with its share in the fourth quarter alone constituting 18.8%.
The 47th President of the US, Donald Trump, has advocated stricter immigration policies and enhanced border security with Mexico which could potentially impede the growth in money transfers. However, similar policies were not implemented during Trump’s first term in office. Notably, remittances from the US increased from USD 142 million to USD 219 million during 2017-2020. Trump’s stance on immigration has remained consistent over the past eight years. Furthermore, concerns regarding mass deportations of migrants from the US may be exaggerated.
The European Union accounts for 43% in remittance flows into Georgia, with transfers exceeding USD 1.4 billion last year. Italy ranks first as the leading source of remittances amongst EU member states, having transferred USD 567 million, surpassing Russia and positioning second only after the US.
Three of the top five remittance source countries – Italy, Germany and Greece – are EU member states. Collectively, these five account for two-thirds of total money transfers. Moreover, 91% of remittances originate from 15 countries, eight of which are EU members.
Graph 4: Top 15 Sources of Remittances (USD Million); EU Member States Marked in Blue
Source: National Bank of Georgia
A mere USD 948,000 was transferred to Georgia from China in 2024, Georgia’s strategic partner – a figure falling short of individual contributions from Bahrain and Oman. The share of money transfers originating from Asia, excluding CIS member states, remains low. The combined volume of transfers originating in China, India, Korea and Japan fell short of USD 3 billion, representing less than 0.1% of the total.
Whilst money transfers do not directly participate in forming the gross domestic product (GDP), they significantly impact one of its key components – consumption. Reliance on remittances remains substantial. The National Bank’s 2023 report indicates that an average of 313,000 to 346,000 individuals received remittances each month between March and December 2023 Moreover, 1.257 million unique individuals have received remittances during the aforementioned period, according to this report (pg. 148-149), constituting more than a third of Georgia’s population.
The relative share of remittances to the GDP exceeds 10%, surpassing the contribution of domestic exports and is 2.5-fold greater than foreign direct investment inflows, according to data from the first three quarters of 2024.
