How much money do immigrants send at the end of the year? Analysis: From the role of remittances in the economy to the impact of the fall of the euro
During 2022 and 2023, immigrants' remittances reached a historical record, reaching the value of 833.7 and 928 million euros. These were the highest figures since 2008. "Scan Intel", starting from the data of the "Bank of Albania", has analyzed the periods when immigrants send more money to our country and how the fall of the euro has affected this indicator.
Based on the quarterly performance of the indicator, the figures show a seasonal pattern, where the second and fourth quarters often reflect an increase in remittances. This increase in the last three months can be attributed to the holiday season, when many immigrants send additional funds to their families. Certainly the trend is in line with global patterns, where remittances tend to peak during festive periods.
If we analyze the figures for 2022 and 2023 as a whole, we see that the highest level of inflows from abroad was recorded in the last quarter of the year. During the last year, in the last three months, the level of remittances was recorded at 252 million euros. If we take the average of this period since 2008, we see that the level of remittances at the end of the year approaches the level of 200 million euros.
These higher incomes certainly also increase purchasing power during this period. Remittances contribute significantly to Albania's GDP, providing a buffer against economic shocks and promoting financial inclusion. They also support domestic consumption, which in turn stimulates local businesses and the wider economy.
According to the figures of the "Bank of Albania", the level of remittances has shown stability and growth over the years, but the fall of the euro has greatly influenced their devaluation. Let's do a short calculation to see how much Albanians lose from the fall of the euro at the end of the year. According to a study by the "Bank of Albania", only 25.5% of families in Albania receive remittances, i.e. 1 in 4 Albanian families. Referring to the calculations and starting from the Census data on the number of families, from the total, about 189 thousand of them are waiting for the immigrants' shipments.
Referring to the figures of the "Bank of Albania", the average Euro-Lek exchange rate, at the end of 2022, was calculated at 116.4 ALL, while remittances from immigrants were calculated at around 241 million euros. Thus, during this period, Albanian families benefited from remittances of around 1,278 euros in three months, or around 148,000 ALL.
But how much did they profit at the end of 2023 with the fall of the euro? According to official data, one euro in the last three months of last year was exchanged for around 104.2 ALL. Meanwhile, remittances in the fourth quarter of 2023 were estimated at 252 million euros, or 1,333 euros per family. Converted into lek, this figure is estimated at about 123,000 lek in three months per family. So, even though remittances were more in 2023, due to the fall of the euro, families benefited less. There are families in Albania that are supported only by remittances and of course the fall of the euro for them means less income and consequently their purchasing power and consequently their well-being.
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