Latest 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
Tirana Times
TIRANA, March 28 – Migrant remittances in 2010 registered their lowest level during the past seven years as Albanian immigrants continue facing the ongoing economic crisis effects in their host countries, mainly Greece and Italy where around one million Albanians live and work. Latest 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 started reporting on them. Migrant remittances registered their highest level in 2007 at 952 million euros, before continuing their declining trend ahead of the global crisis effects in 2008 and 2009, when they fell to 833 and 781 million euros respectively.
Periodical data show remittances in the final quarter of 2010, when thousands of migrants come home to celebrate the year-end holidays dropped to 165 million euros, down from 227 million euros in the final quarter of 2009.
A recent 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. The study also reveals that in the short-term remittances in Albania increase when the national currency, lek, appreciates, especially against the Euro, but also when the inflation rate increases.
The World Bank also says remittances from Albania’s diaspora depend on EU’s economic performance. Inflows in 2009 already declined by 3 percentage points of GDP compared to 2007. Remittances in turn constitute a critical driver of Albania’s domestic demand. Econometric 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 party been a result of declining inflows from workers abroad.
Immigrant remittances, a vital source of income to dozens of thousands of families in Albania showed slight signs of recovery during the third quarter of 2010 but remained lower compared to the first nine months of 2009. Central bank data show remittances during the third quarter of 2010 registered a slight increase to 135 million euros, 4 million more than the same period last year, but remained far below the pre-global crisis period, the third quarter of 2008 at 214 million euros and the third quarter of 2007 at an almost record 250 million euros.
Total remittances sent during the first nine months of 2010 dropped to 524 million euros, down from 555 million euros during the same period in 2009 and 620 million in the first three quarters of 2008.
Experts say remittances will continue their declining trend despite the crisis effects because most immigrants are creating their own families abroad and often even taking their parents with them.
Meanwhile, dozens of Albania immigrants, mainly in neighbouring Greece have retuned to start new lives in Albania, unable to find a job for several months and pessimistic that the severely crisis-hit country will recover in the next few years.
Albania is particularly vulnerable to a serious Greek downturn, as the majority of remittances in Albania come from migrants in Greece, many of whom work temporarily in seasonal jobs, says EBRD in its 2010 economic outlook report.
Remittances accounted for 10.7 percent of the GDP in 2009, down from 10.9 percent in 2008 and 13.5 percent in 2007.
The average amount of quarterly remittances a household received in 2009 dropped to 270 euros, down from 289 euros in 2008, according to findings of a survey carried out by the Bank of Albania and the country’s Institute of Statistics (INSTAT). The survey showed the average quarterly amount of remittances in 2009 dropped by 7 percent compared to 2008. Some 800 families previously covered in the survey were excluded from the 2009 questionnaire because of not receiving remittances anymore and replaced with 1,000 new families.
Around 46 percent of immigrants sending remittances were reported to living in neighbouring Greece, compared to 41 percent in Italy. A majority of 87 percent of families said they received remittances from acquaintances or immigrants themselves when coming home usually for summer or Christmas holidays, leaving formal money transfers at a limited number.
