Money sent home by migrant workers accounts for more than a quarter of GDP in Tajikistan and Kyrgyzstan. Volume of remittances in the Eastern Europe and Central Asia region are recovering faster than expected, Emerging Europe reports.
Remittances to Kyrgyzstan and Tajikistan account for over 25 percent in the share of GDP. An average size of a money transfer to these countries is $200. An increase in money transfers from 0.1 percent to 6.6 percent compared to last year was registered in the first quarter of 2021.
According to KNOMAD forecasts, UN initiatives to collect data and assess the processes of migration and development, the volume of money sent home by migrant workers (the main source of income in several countries of Eastern Europe and Central Asia) will grow by 5.3 percent to $67 billion by the end of 2021.
The increase in remittances was made possible by stronger economic activity in the European Union and higher energy prices. Remittances are projected to grow by 3.8 more percent in 2022.
In 2020, the volume of transfers to Eastern Europe and Central Asia fell by 8.6 percent. The region has benefited significantly from the recovery of the Russian and Polish economies and the rise in oil prices.
Remittances from Russia are mainly related to the non-trade sectors (health care, education, real estate and construction), where the majority of migrant workers are employed.
However, further growth could be hindered by a larger-than-expected slowdown in the major economies where remittances are sent from and the challenges in the energy market that could arise from a sudden drop in oil prices. Deteriorating fundamentals and the vulnerability of economies can also negatively impact the remittances.
«Remittances from migrants greatly complement government funding programs for families facing difficult times amid the COVID-19 crisis,» Mikhail Rutkowsky, World Bank Director for Social Protection, Labor and Jobs said. «Ensuring the smooth flow of remittances to make life easier for families in difficult situations is an important challenge for government programs to support global recovery from the pandemic.»
Elsewhere in Eastern Europe and Central Asia, remittances account for more than 10 per cent of GDP in Kosovo (16.7 per cent), Moldova (15.2 per cent), Georgia (12.3 per cent), Uzbekistan (11.6 per cent), and Montenegro (11.4 per cent).
