The remittances of the Romanians abroad, the surest stream of
financing for the foreign deficit over the last few years,
collapsed in July, plummeting 90% compared with the same time of
last year..
Current transfers, which are primarily money sent back home by
the Romanians working abroad, significantly decreased, with the
monthly surplus reaching a mere 120 million euros in July, compared
with 500 million euros in the corresponding month of 2008,
according to the NBR data. Compared with a decline of only 10% in
the first five months of the year, the total volume of remittances
was almost 30% lower in the first seven months.
“Net current transfers performed poorly in July. The monthly
surplus stood at merely 120 million euros, one of the lowest values
of the last five years. Beyond the effects caused by the reduction
of the annual nominal wage increase pace and by the slowdown of the
lending, consumer spending is also affected by the decline in
remittance-related incomes,” believes Florin Sinca, analyst with
BCR.
After a number of years of steady growth, remittance flows
started to slow down this spring. In April, the decline stood at
27%, in May it was lower, 15%, only to reach 50% in mid-year. The
trend comes as a result of the international financial crisis and
of the deterioration of the economies of the Western
countries.
“Remittances fell in June and July, because in August
Romanians came back home, anyway, and spent the money directly,
without resorting to cash transfer solutions. We recorded an
increase in brick sales in July and August, when Romanian workers
came back and sales started to go down in September,” says Iulian
Mangalagiu, general manager of construction supplies producer
Ceramica Iasi. He added that the Romanians who came back from Italy
and Spain bought construction materials in August because they were
cheaper, with very many houses in Suceava, Botosani and Iasi
counties storing bricks in their yards now.
Romanian ‘strawberry pickers’ have been among those who sent
the highest amounts of money back home in Europe in recent years.
According to World Bank statistics, Romania ranked first in Europe
and tenth in the world in terms of money sent back by migrants
working abroad in 2007.
Remittances exceeded one billion euros for the first time in 2001, having gone up since then, to more than 6 billion euros in 2008.