Remittances From Romanians Abroad To Reach $9B In ’08 – World Bank

In 2007, Romania ranked on tenth position in the same classification, but, despite this year’s growth, the outlook for the next years is not as positive because of international financial turmoil.

"A slowdown in remittance flows to countries such as India and Mexico, where remittance inflows are large in dollar terms, but small as a share of gross domestic product, can affect a large number of remittance‐recipient households. Remittance‐receiving households in several other large countries, such as the Bangladesh, Morocco, Nigeria, Romania and the Philippines, are similarly vulnerable,” the study stated Thursday.

According to the new estimations, India ($30 billion), China ($27 billion) and Mexico ($23.8 billion) are likely to maintain their position as the top three recipients of remittances among developing countries in 2008.

The top 10 recipients’ list also includes Philippines, Poland, Nigeria, Egypt, Bangladesh and Pakistan.

After several years of strong growth, remittance flows to developing countries began to slow down in the third quarter of 2008. This slowdown is expected to deepen further in 2009 in response to the global financial crisis, the study’s authors said.

The total remittance flows to developing countries are estimated to reach $283 billion in 2008, up 6.7% from $265 billion in 2007. In 2009, the remittances are expected to fall by 0.9%, or, in the worst case, by no more than 6%.

Remittances from Romanians working abroad will significantly shrink in the next period, due to the decline in Western economies, but foreign investments will keep on growing despite the real estate market’s slowdown, central bank deputy governor Eugen Dijmarescu forecasted in October.

The remittance flows of Romanian citizens working abroad contribute, alongside with direct foreign investments, to financing the current account deficit.

Romania’s current account deficit soared 14.75% on the year in January-September period, to EUR12.7 billion, from EUR11.07 billion in the same period a year earlier, driven by a wider trade deficit, the central bank said in a statement Wednesday.