The flow of Money from Emigrants to Bulgaria has been Decreasing

Society | May 23, 2022, Monday // 10:43
Bulgaria: The flow of Money from Emigrants to Bulgaria has been Decreasing

I am waiting for the decision for pension and I will return to Sliven. 20 years here are enough for me.”

This was said by a woman who works in a supermarket in Rome. She can no longer wait to go home, to Bulgaria, to spend her retirement pension.

According to NSI data, the number of emigrants returning home who have been sending money to their relatives while working there has been gradually growing in recent years. At the same time, remittances from emigrants to Bulgaria have fallen significantly over the past two years. However, there is no such decline in the countries similar to Bulgaria in terms of economic development.

Another growth for the world, another decline for Bulgaria

The World Bank estimates that remittances to low- and middle-income countries will increase by 4.2% to reach $630 billion this year. This is followed by an almost record recovery of flows of 8.6 percent in 2021, according to the latest report on migration and development of the institution, published recently.

According to it, since the beginning of the pandemic, the money sent by Bulgarians working abroad to their relatives in Bulgaria has been decreasing. These figures are not unexpected given the fact that with the mass closure of businesses around the world due to COVID-19, many of them lost their jobs and returned home.

At the same time, as the data show, the remittances of emigrants from other countries in the region to their relatives are not only not decreasing, but even increasing. The authors of the study do not answer the question of what are the possible reasons for this.

Experts following the issue also noted this "anomaly", but have not yet found an explanation. They assume that there may be a change in reporting. The model for estimating data on remittances from Bulgarians living abroad has not changed, the BNB said in response to questions from the Bulgarian media “Dnevnik”.

They add that its latest updates are from April 2018. They also recall that the data for 2020 and 2021 are preliminary and subject to revisions, in accordance with established practice and the ECB calendar for the exchange of balance of payments data. According to the methodology, the revisions are based on updated information on consumer price indices and the number of emigrants. Revised data for the period January 2020 - December 2021 are to be published on 19.09.2022.

The data of the National Statistical Institute do not show a drastic change in the number of Bulgarians who changed their permanent address from abroad to Bulgaria during the pandemic years. According to them, in the year before the pandemic - 2019, a total of 37,929 Bulgarians have changed their permanent address from one abroad to Bulgarian, and then the number remains almost the same. In 2020, 37,364 Bulgarians did so, and in 2021 - 39,461. If you look at the years before, you can see a gradual increase in returnees, but it is one that explains the data for the two years of the pandemic.

Remittances from emigrants to Bulgaria, million euros

Emigrant transfers to the respective countries according to the World Bank
From top to bottom: Bulgaria, Croatia, Romania, Serbia, Greece, Montenegro, Turkey, Belarus, Bosnia and Herzegovina

The war also influenced the money transfers

The World Bank expects remittances to Ukraine, the largest recipient for Europe and Central Asia, to grow by more than 20 percent in 2022. However, remittance flows to many Central Asian countries, for which the main source is Russia is likely to decline dramatically. These declines, combined with rising food, fertilizer and oil prices, are likely to increase food security risks and increase poverty in many of these countries.

"Russia's invasion of Ukraine has caused large-scale humanitarian, migration and refugee crises and risks to the global economy, which is still struggling with the impact of the COVID pandemic," said Michal Rutkowski, global director of social protection and jobs at the World Bank.

"Promoting social protection programs for the most vulnerable, including Ukrainians and families in Central Asia, as well as those affected by the economic impact of the war, is a key priority in protecting people from threats of food insecurity and growing poverty," he said.

Growth in the European Union

The inflow of remittances to Europe and Central Asia increased by 7.8 percent in 2021, reaching a historic high of $ 74 billion. The growth is largely due to stronger economic activity in the European Union and the recovery of rising energy prices.

In 2021, remittances to Ukraine reached $18.2 billion, driven by revenues from Poland, the largest host country for Ukrainian migrant workers. Short-term forecasts for remittances to Russia and neighboring countries, which are expected to fall by 1.6% in 2022, are very uncertain. They depend on the scale of the war in Ukraine and sanctions on outgoing payments from Russia, where many people from the former Soviet republics make a living.

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