The flow of money sent by foreign emigrants is faltering this year: the amount could be three times less

The numbers will be less

Mantas Vilniškis, Economist in the Macroeconomics and Forecasts Division of the Bank of Lithuania (LB), explained that overall, the dynamics of personal remittances to Lithuania have not changed significantly since 2015 and have reached approximately LTL 1.1 billion annually since Foreign. EUR.

However, according to him, this year will be different, because due to the coronavirus pandemic and its impact on the economy, personal remittances to and from Lithuania have been reduced.

In the first half of this year, compared to the corresponding period of the previous year, personal transfers to Lithuania decreased by 35%, and according to LAC data, in the second quarter of this year, transfers to Lithuania amounted to 137 , 77 million LTL. EUR, while compared to the same period of 2019 amounted to 283.81 million euros. EUR.

Speaking of remittances to Lithuania, M. Vilniškis considered that the world economy, as well as countries with a large number of Lithuanian emigrants, were the most affected by the restriction of economic activity to stop the pandemic.

“Restaurants, bars, cafes and hotels were restricted, and migrants working in the sector were likely to lose their jobs or participate in ‘downtime’ programs. This also affected their income and expenses, part of which is usually money transferred to Lithuania.

This impact is not limited to the services sector, but other sectors have been indirectly affected by the pandemic through the drop in demand, “he explained.

It is true that during the pandemic, remittances from Lithuania to foreign countries also decreased significantly.

They fell about 40 percent in the first half of this year compared to the same period last year. LB data shows that in the second quarter of 2020. Remittances from Lithuania abroad amounted to 44.93 million LTL. EUR, while in 2019 in the same period amounted to 106.06 million euros. EUR.

“Transfers from Lithuania can be linked to employees from third countries.

As their numbers in Lithuania increased in 2019, so did personal remittances to third countries. This year, when the pandemic disrupted normal economic activities, personal remittances from Lithuania fell dramatically and the decline was also visible in remittances to third countries, ”he commented.

According to the economist, the greater development of personal transfers will be closely related to the economic situation in Lithuania and the world and to the development of the pandemic.

“If the spread of the pandemic is stopped, personal remittance flows would return to the long-term trend, with approximately 1 billion LTL being transferred to Lithuania every year. EUR, and from Lithuania about 400 million. EUR.

This year, we can expect around three times less remittance inflows to Lithuania, and next year, if the virus is halted in the middle of the year due to an optimistic scenario, its recovery will recover, but at a lower level than before the pandemic, “he predicted.

The lower amount of money received did not have a strong impact on the economy

Aleksandras Izgorodinas, an economist at SME Finance, told Delfi that the decline in remittances from abroad did not have a significant impact on Lithuania’s economy and consumption.

“In the first semester of this year, remittances from emigrants amounted to 357 million. Eur, but at the same time consumer spending by consumers in the first half of the year. In Lithuania it amounted to 14.1 billion. EUR. This means that if we theoretically assume that all remittances were released for consumption, then remittances would represent only 2.5 percent. of the total consumer spending of the Lithuanian population, which, actually, does not do much drama for the economy and consumption ”, – the number compared it and gave another example.

According to him, in the first half of this year. compared to 2019. In the first half of the year, remittances from emigrants fell by 35%, while consumption in Lithuania fell by only 3%. In Lithuania.

“This means that remittances from non-migrants have a significant impact on consumption. Of course, it may have contributed to the drop in consumption, but it certainly wasn’t a major impact.

Consumption and consumer expectations have a significant impact on consumption. A couple of months ago, Lithuania was one of the leaders in Europe in terms of population optimism and at the same time one of the leaders in Europe in terms of consumption growth rate, ”said A. Izgorodin.

The effects of the pandemic were not felt

Revolut monitors slightly different money transfer trends by analyzing their customer data. According to Virgilijus Mirkė, director of Revolut in Lithuania, even with the onset of the global pandemic, the volume of international transfers between their clients has increased.

“If we compare the changes since the start of the pandemic in March this year with the same period last year, the number of transactions increased by 10% this year, the total amount of international transfers increased by up to 40%.

The average amount of international transfers to Lithuania during the pandemic was 476 euros and was 29 percent. higher than in the same period last year, ”he said.

According to the manager, the most popular countries from which Revolut clients in Lithuania received negligible international transfers during the pandemic, most of the funds were transferred from Great Britain both this year and last year, among other traditional Lithuanian emigration directions. : Norway, Germany, the Netherlands.

“The top five countries are the United States, where we started providing our services this year. Lithuanian residents also received the largest average transfers in the US, on average even EUR 11 thousand. Among the largest average transfers to Lithuania is Switzerland and Norway, respectively 2020 and 1461 Eur ”, said V. Mirkė.

Regarding international transfers from Lithuania, the manager said that during the pandemic, their growth was also recorded.

“The number of transactions grew by up to 37 percent, and the total amount of transfers also increased by a third, when compared to the same period last year.

On average, an international transfer from Lithuania amounted to 375 euros, 14 percent. more than last year. Most of the Lithuanian funds traveled to Great Britain, the United States, Germany, Austria and Poland, ”he said.