With more Croats fleeing the country, remittances break new records.
There are more and more Croats moving abroad, which has resulted in remittances sent by the diaspora reaching record levels. According to the data of the Croatian National Bank (HNB), in 2017 Croats working abroad sent payments in the record amount of 15.75 billion kuna or about 2.1 billion euro. That was about 120 million euro more than the year before, which clearly underscores the fact that moving abroad to work (and live) is becoming more widespread, reports Jutarnji List on March 26, 2018.
Ten years ago, remittances from abroad amounted to about 1.3 billion euro, with a slight increase in 2011 when they reached 1.5 billion euro. Since then, there has been a somewhat higher growth, with remittances now growing every year by about a hundred million euro.
The data reflects the official figures on emigration, which began to increase in 2014 and 2015, with escalation taking place in the last two years. The number of emigrants in 2011 and 2012 was around 13,000, while in 2013 the emigration rate increased to about 15,000 people, up 15 percent. In 2014, 21,000 people moved abroad, up 40 percent, while nearly 27,000 people left the country in 2015, which was a further increase of 30 percent. In 2016, according to data from the Central Bureau of Statistics, the country lost some 39,300 people, which was 45 percent more than in 2015, and the trend further strengthened last year.
According to the latest data, if the amount of remittances is divided with an estimated number of Croats living and working abroad, it turns out that the average emigrant sends more than 6,000 euros per year to Croatia. Of course, this is just the money paid into bank accounts, while we can only speculate about cash remittances. Two years ago, the government estimated that more than 8.5 billion kuna was transferred to the country in cash.
The importance of remittances for the economy is seen by the fact that this amount (not even including cash remittances) represents 4.4 percent of GDP. If cash is added, the money sent from abroad is equal to the salaries paid by the government to the whole public sector, not including healthcare services. If the amount is compared with the total foreign direct investment in Croatia, it can be seen that it is at least 50 percent higher since investments reached a total of 1.3 billion euros.
The inflow of money from those who went abroad improves the general economic picture in Croatia. These are people who do not pay taxes or pension and healthcare contributions in Croatia, but whose funds somewhat mitigate the impact of the recession, reduce the pressure for reforms and mitigate the dissatisfaction due to low living standard.
In any case, Croatia is losing people, but it at least has a small financial benefit. However, according to economist Željko Lovrinčević, “There is not a single country which became rich from emigrants’ remittances.”
Translated from Jutarnji List (reported by Dražen Gudić).
