Migrant remittances hit a record low of 497 million euros in 2013, down from 675 million euros in 2012 and a historic high of 952 million euros in 2007 just before the outbreak of the global financial crisis.
TIRANA, April 1 – Affected by crisis in Italy and Greece where around 1 million Albanian migrants live and work, migrant remittances have almost halved in the past seven years due to the crisis in these two host countries which are also Albania’s top trade partners.
Bank of Albania data show migrant remittances hit a record low of 497 million euros in 2013, down from 675 million euros in 2012 and a historic high of 952 million euros in 2007 just before the outbreak of the global financial crisis. At only 497 million euros, migrant remittances registered a record low for the past decade.
On a falling trend since the 2008, the sharp cut in migrant remittances has also influenced on the slowdown of the Albanian economy in the past five years. The cut in remittances has also influenced on the crisis in the still ailing construction sector.
A 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.
In addition to crisis impacts, experts say remittances will continue to decline because most immigrants are creating their own families abroad and often even taking their parents with them.
Migrant remittances, a vital source of income for thousands of families in Albania, have considerably dropped during the past five years affecting the beneficiaries’ consumption and living conditions. A study conducted by the Agenda Institute back in 2011 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 major 74 percent of remittances to buy 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 expenditure.
The study showed around 80 percent of remittances come from neighboring Greece and Italy and 8 percent from the United States.
