TIRANA, Sept. 14 – Migrant remittances continued declining in the first half of this year as the economies of key trading partners Italy and Greece, the hosts of about 1 million migrants, struggled to recover.
On a falling trend since the outbreak of the global financial crisis in 2008, remittances dropped by an annual €14 million to €290 million in the first half of the year, according to central bank data.
The new decline was fuelled by an ongoing economic contraction in neighbouring Greece, the country’s second largest trading partner and the host of some 500,000 Albanian migrants, once the largest source of remittances for thousands of poor households in Albania.
The Greek economy contracted by about 1 percent in the first half of this year following a six-year recession ending in 2013 that shrank the neighbouring country’s economy by about a quarter.
Meanwhile, Italy, Albania’s neighbour across the Adriatic showed modest signs of recovery in the first half of this year, with its economy growing by about 1 percent following a three-year recession ending in 2014.
Some 500,000 Albanians live and work in Italy, Albania’s main trading partner and one of the top foreign investors.
Migrant remittances registered a slight recovery in 2015 when they rose to €598 million, up only €6 million compared to 2014 apparently affected by the escalation of the crisis in neighboring Greece and restrictions imposed on banking transactions there.
Despite the modest recovery, remittances remained almost 40 percent below their peak level of €952 mln 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 revenues 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 dropped to about 5.7 percent of Albania’s GDP in 2015 compared to a record high of about 16 percent of the GDP a decade ago.
