Central bank data show remittances dropped to 153 million Euros in the first quarter of this year, down from 170 million Euros during the same period in 2010, registering a 9 percent decrease year-on-year
TIRANA, June 14 – Migrant remittances suffered another blow during the first quarter of this year as Albanian immigrants continue to face 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 to 153 million Euros in the first quarter of this year, down from 170 million Euros during the same period in 2010– registering a 9 percent decrease year-on-year. In 2009 remittances in the first quarter were at 183 million Euros, compared to 213 million Euros in 2008 and the record 232 million Euros in 2007. Bank of Albania data show that immigrants have transferred 4 million Euros from outside Albania in the first three months of this year, the highest quarterly amount reported since 2004. 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. 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. 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. FDI drops to 57 million Euros Foreign direct investment registered one of its lowest quarterly levels during the first three months of this year dropping to 57 million Euros, down from 166 million Euros during the same period a year ago. The drop of 65 percent during the first three months of this year represents the lowest quarterly levels since the second quarter of 2007 when FDI was at 56 million Euros. The ongoing political crisis and its escalation during an anti-government protest in January 21, could have also influenced the FDI retraction. However, the privatization wave launched by the government is expected to considerably improve FDI inflows throughout the remainder of this year.
