TIRANA, Dec. 14, 2023 – Reflecting renewed emigration, remittances to Albania during 2022 saw a significant increase, reaching the highest levels of the past decade, data released by Eurostat this week reveals.
According to Eurostat, remittances exceeded €1.2 billion in 2022, a 5.8% increase compared to 2021.
This high value is reported for personal transfers and earnings of workers employed abroad.
Eurostat indicates that the primary source of remittances for Albania and the region is the European Union.
Based on other data published by Albania’s central bank, the upward trajectory of remittances has persisted into the first half of 2023.
Over the initial nine months, remittances from emigrants and earnings from employment surged to €1.05 billion, marking an impressive 16.3% increase compared to the same period last year.
Remittances typically decline the longer a migrant lives outside the country and they had steadily decreased in Albania in the past decade, however the country is now in the midst of a large emigration wave that has led to higher remittances while also lowering domestic consumption.
Long a financial lifeline for many families in Albania, remittance numbers have gone up and down with migration numbers. Their level saw its peak in 2008, then declined, but it has seen an increase since 2014.
Traditional host countries Italy continue to be the top remittance source, but Germany and the United Kingdom are now the fastest rising sources, with Germany in particular hosting more recent arrivals.
Despite the increase, Albania continues to remain below the Western Balkans’ average regarding the impact of remittances on the domestic economy.
In 2022, their weight in proportion to Gross Domestic Product (GDP) was 9.2%, while the regional average was close to 10.5%.
Kosovo remains the leader on this list, with remittances constituting 17.2% of the country’s GDP in 2022. Following them are Montenegro with 13.3% and Bosnia and Herzegovina with 10.2%. Albania holds the fourth position, with Serbia and North Macedonia concluding the list.
The total number of personal transfers from the EU to non-EU countries witnessed a substantial increase, reaching over €43.5 billion last year, a 14% growth compared to 2021.
The latest data comes as Bank of Albania has announced its efforts to integrate Albania into the Single Euro Payments Area (SEPA), aiming to lower fees for money transfers to and from Europe.
In addition to lower costs for migrants who send money back home, the move is expected to bring significant advantages for Albanian businesses and consumers while simultaneously impacting strategic sectors such as tourism and exports to the European Union.
