According to the Romanian National Bank (BNR), the Romanian seasonal workers employed in Western countries have sent or brought home EUR 2.3 billion in the first eight months of 2020. This is more than double the amount that investors have brought to the country this year and the amount of EU funds Romania received in 2020, reports maszol.ro, a Hungarian news portal in Romania.
According to BNR, the remittances of seasonal workers have decreased by 13 percent compared to last year, from EUR 2.6 billion in 2019 to EUR 2.3 billion. However, this decrease is very low if we take into account the economic situation due to the coronavirus, maszol.ro points out. More notably, this year, the amount of money sent home by seasonal workers has surpassed the amount of both foreign investments and EU funds.
Direct foreign investment is less than EUR 1 billion this year; the figure is EUR 1.4 billion if you count loans provided by foreign companies to their affiliated firms in Romania. The total value of FDI has decreased by 67 percent compared to last year, maszol.ro reports.
Meanwhile, in the first eight months of 2020, Romania managed to receive EUR 1.7 billion from European Structural and Investment Funds. If we take into consideration all EU funds received this year, this amount grows to EUR 4.9 billion, but we have to deduct EUR 1.5 billion, the value of the Romanian contribution to these funds.
The money from seasonal workers has a great impact on the Romanian economy, maszol.ro stresses. As the news portal points out, on the one hand, it increases the purchasing power and stimulates consumer demand for goods and services; on the other hand, it contributes to reducing the foreign trade deficit and stabilizing the euro/lei rate. The foreign trade deficit was EUR 5.8 billion at the end of August, 17 percent less than a year ago. Without the remittances of seasonal workers, it would have grown by 40 percent.
According to maszol.ro, the Romanian National Bank has been monitoring the amount of money brought into the country by seasonal workers since 2005. In the last 15 years, these workers have pumped EUR 69 billion into Romania’s economy, which is almost one third of last year’s GDP. This is almost EUR 30 billion more than the net amount Romania has received from the European Union since its accession in 2007.
Since 1989, foreign companies have invested EUR 88.3 billion in Romania, only EUR 20 billion more than the amount seasonal workers sent home in just 15 years. So it is likely there would be no significant difference between the two amounts if we had data for the latter since 1989 as well.
Title image: Romania is one of the largest providers of seasonal workers in Europe, with millions of people leaving the country to work abroad