TIRANA, Sept. 19 – Migrant remittances remained almost unchanged in the first half of this year, reconfirming their uphill battle to return to the pre- global crisis level despite Albania’s key partners Italy and Greece having escaped recession.
Central bank data shows migrant remittances, still a key source of income for thousands of poor households, grew by only about 2.8 percent to €298 million in the first half of 2017, up only €8 million compared to the same period last year, but almost 40 percent down compared to a decade ago just before the onset of the global financial crisis in 2008.
Albania has about 1 million migrants in Italy and Greece, the key trading partners, investors and sources of remittances, but whose recession since the global crisis and return to modest positive growth rates in the past few years has also had spillover effects for the small Albanian economy.
In its latest economic outlook, the European Commission expects the Italian economy to continue expanding by about 1 percent in 2017 and 2018, driven by stronger external demand and the recovery of investment.
Albania’s top trading partner and of the main foreign investors in the country, Italy has been one of Eurozone’s hardest hit economies since 2009, registering recession in 2008-2009 and 2012-2014.
Prospects for Albanian migrants in Greece have become more optimistic in the past three years as the neighbouring country gradually escaped its worst ever recession and is set to register positive growth rates of 2.1 to 2.5 percent in 2017 and 2018 on improving consumer and investor sentiment and a boost in its key tourism industry.
Fuelled by a recovery in Italy and Greece, remittances slightly recovered for the third year in a row in 2016 when they climbed to €616 million, but remained about a third below their peak level of €952 million in 2007 just before the onset of the global financial crisis, according to the country’s central bank.
The sharp cut in remittances, one of the main sources of revenue for thousands of households, has considerably affected domestic consumption and the construction sector which has been paralyzed facing lack of demand and a stock of unsold apartments following a pre-crisis boom.
In addition to crisis impacts, experts say remittances will continue to decline on social factors because most immigrants are creating their own families abroad and often even taking their parents with them.
Migrant remittances now represent about 6 percent of Albania’s GDP compared to a record high of about 16 percent of the GDP a decade ago.
