Official Bank of Albania data show migrant remittances in the second quarter of 2011 dropped by 13.7 percent to 189 million Euros, down from 219 million Euros during the same period last year
TIRANA, Sept. 12 – Migrant remittances, one of the main sources of income for thousands of poor families continued their downward trend even in the second quarter of this year, registering their lowest quarterly level for the past seven years as Albanian migrants face crisis effects in their host countries. Official Bank of Albania data published this week in the current account show migrant remittances in the second quarter of 2011 dropped by 13.7 percent to 189 million Euros, down from 219 million Euros during the same period last year. However, remittances slightly recovered compared to the first quarter of this year when they were at 153 million Euros. In total, migrants sent 342 million Euros during the first half of this year compared to 389 million Euros during the first half of 2010. Migrant remittances in 2010 registered their lowest level of the past seven years. Central bank data show remittances dropped by 12 percent to 690 million Euros in 2010, down from 781 million Euros in 2009 and 774 million Euros in 2004 when the Bank of Albania first started reporting remittance data. Migrant remittances registered their highest level in 2007 at 952 million Euros, before declining ahead of the global crisis in 2008 and 2009, when they fell to 833 and 781 million Euros respectively. A new study conducted by the Agenda Institute shows more than half of surveyed families in Albania report receiving less in remittances during the past five years. The study which surveyed more than 1,200 families during this year showed Albanian households spend the majority 74 percent of remittances on food products. Some 60 percent of beneficiary families are reported to have cut down on consumption as Albanian migrants face the crisis effects in their host countries, especially Greece and Italy where more than 1 million Albanian migrants live and work. The study showed remittances are vital for around 60 percent of families with monthly revenues up to 300 dollars. Albanian migrants sent an average of 1,400 Euros per year to help their families with food, clothes and healthcare expenditures. Milva Ekonomi, the director of the Agenda Institute recommends cutting the value added tax (VAT) on food articles as one of the measures to help Albanian families. Promoting employment through vocational education and drafting policies to attract more foreign direct investment and increase exports are some other measures recommended by the Agenda Institute. The study showed around 80 percent of remittances come from neighboring Greece and Italy and 8 percent from the United States. Another study carried out by the Bank of Albania has found that remittances, one of the main sources of income for thousands of families in Albania, are very sensitive to the economic activity in the Eurozone, where most Albanian immigrants live and work. Remittances also constitute a critical driver of Albania’s domestic demand. Estimates suggest that for the overall economy (excluding agriculture) a 10 percent decline in remittances would lead to a 3.6 percent reduction in domestic demand, as provided by the index of sales. The sectors affected the most by remittances are construction, services and food, which are also the key contributors to Albania’s GDP. It is believed that the sharp contraction in construction has partly been a result of declining inflows from workers abroad. Experts say remittances will continue to decline because most immigrants are creating their own families abroad and often even taking their parents with them.
