The volume of money transfers from individuals abroad to Ukraine has been decreasing for the second consecutive year

For the second year in a row, the volume of money transfers to Ukraine, which was previously one of the main sources of currency inflow into the country, has been decreasing.

This is evidenced by a new report from the National Bank of Ukraine, published today.

According to the report, the National Bank of Ukraine states that by the end of 2023, a total of $11.6 billion was sent to Ukraine through various methods. This includes all transfers by individuals: through banks (from account to account), through international payment systems (including without opening an account), through postal offices, and even unofficial transfers (hand to hand), which, according to the regulator’s statement, are also taken into account in its methodology.

If we examine the reports of the National Bank of Ukraine over time, we will see a steady decrease in money transfers by individuals during the ongoing conflict: in 2023, their volume decreased by 7.8%, and in 2022, by 10.5%. In absolute terms, the dynamics are as follows:

• 2021: $14 billion;
• 2022: $12.5 billion;
• 2023: $11.6 billion.

Financial analysts note several main reasons for the decrease in cash inflows:

1. Gradual relocation abroad after the invasion of families of labor migrants who were outside of Ukraine even before the conflict. Therefore, they no longer need to send money to their relatives.
2. Decrease in the activity of the IT sector and receipts in the form of salaries for programmers from abroad.
3. Rise in prices for goods and services in Europe, which reduces the cash balances of migrant workers and remittances home.

Analysts predict further reduction in money transfers to Ukraine, which is confirmed by the latest figures from the National Bank of Ukraine, which reported only $898 million in January 2024. This is worse than the previous similar indicators:

• January 2024: $898 million;
• January 2023: $947 million;
• January 2022: $1.1 billion.

“I think that in 2024, only about $10.5-10.8 billion may be transferred to Ukraine, depending on the indicators and components that the National Bank will continue to evaluate,” analyst forecast.

At the same time, currently, much more money is leaking out of Ukraine through the expenses of Ukrainians abroad than is coming into the country in the form of money transfers. According to Deputy Chairman of the National Bank of Ukraine, Sergey Nikolaychuk, the constant outflow of funds from Ukraine by the population in the “travel” category amounted to $20 billion in 2022 and $18 billion in 2023.