Moldova's gross domestic product remittances' share declines twice in recent decade

Chisinau, 13 April /MOLDPRES/ – Moldova ranks the 3rd among states of European region and Central Asia according to the share of money transfers made in 2018 from abroad in Moldova referred to Gross Domestic Product (PIB), with a share of 16.1 per cent, according to the World Bank (WB) study – Migration and Remittances.

The foreign currency transfers remain a very vital source for developing economies. However, the data of WB show that remittances play a smaller role in growth of economy, if in 2008, when the transfers reached a record figure of $1.66 billion, they accounted for about 33 per cent of PIB over recent decade, which have declined twice.

The top GDP transfers of Europe – Central Asia are: Kyrgyzstan with a 33.6 per cent share, followed by Tajikistan (31 per cent). Other states included in the ranking are Kosovo, with remittances in GDP of 15.8 per cent, Georgia – 12.2 per cent, Armenia – 12.1 and Ukraine 11.4 per cent.

With $14.4 billion, Ukraine is the largest recipient of remittances in the region in 2018, followed by Russia, with $8.6 billion, Poland – $7.4 billion and Romania – $5.2 billion.

The value of cash transfers made in favour of individuals through the Moldovan banking system increased by 5.8 per cent in 2018 compared to 2017, up to $1 billion 255.8 million, according to data from the National Bank of Moldova (BNM). The transfers throughout the EU money – remittance systems to individuals have doubled within recent 05 years up to 40.43 per cent in 2018, amid substantial reductions in the CIS remittances from 66,3 per cent in 2013 to 28.3 per cent in 2018.

According to the National Bureau of Statistics (BNS) for 2018, "money transfers from abroad remain a significant source for the household budget. On average, they represent 15.0 per cent of total revenue or 1.5 percentage points less than in 2017". The rural population compared to urban one is more dependent on transfers from abroad, their share in revenues being 20.4 per cent compared to 10.0 per cent for urban population, according to statisticians.