A study published on the website of the World Bank sounds the alarm: the world economic crisis would push the growth rate of remittances during the next two years down, impacting greatly the population and the savings. The rate of growth of remittance inflows to Moldova is expected to decline in 2009-10; however these flows will remain positive as the remittance source countries in the region are expected to experience a more modest slowdown compared to the U.S and Europe. Remittances sent home by the individuals working abroad have increased by 40.5% a year during the past four years. According to the National Bank of Moldova, they rose threefold, from 317.29 US dollars in 2003 to 1.218,30 billion US dollars in 2007. During the first eight months of this year, remittance inflows to Moldova came to 1.108 billion US dollars. By comparison, exports totaled 1.203,3 billion US dollars over nine months. In the given study, Moldova is ranked second in the list of the top recipients in terms of the share of remittances in GDP among developing countries with a share of 38.3% in 2007. It is outstripped by Tajikistan with a 45.5% share of remittances in GDP. During the past ten years, remittances to Moldova have risen over ten times. At the end of the 90s, the estimated several dozens of thousands of people working abroad transferred home 100-150 million US dollars, with the remittances increasing slightly during the next two-three years. Between 2004 and 2007, when the economic migrants amounted to 350,000-500,000, remittances increased considerably. One the one hand, the money sent home by the Moldovans working abroad increased the low incomes of their families. On the other hand, they stimulated consumption and economic development. Foreign experts also say that it was mainly the remittances that fueled economic growth in this period. It seems that difficult times have come for those that work abroad, especially because 70-80% of the Moldovans in Italy, Portugal and Russia are undocumented emigrants, according to some reports. These persons will be seriously affected by the crisis. 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, although the exact magnitude of the growth moderation or outright decline in some cases is hard to predict given the uncertainties about global growth, oil and non-oil commodity prices, and currency exchange rates. The National Bank of Moldova said that remittances in August added up to 167.76 million US dollars, down 15 million US dollars from July. But experts avoided saying that was a temporary decrease or a pure coincidence. A more exact conclusion could be made only after the statistics for September-October are made public. But most of the economists predict that the rate of growth of remittance inflows will be lower compared with the previous years. In October, the IMF Resident Representative in Chisinau Johan Mathisen also said that remittances will decrease. Moldova risks being seriously affected by the return of the economic migrants and by the fall in remittances — even those that will remain in Italy and Spain will earn less and will thus transfer less, considers expert Alexandru Culiuc. The sectoral profile of migrants will also determine the elasticity of migrants’ incomes to the economic downturns in the host countries. For example, countries whose migrants are employed in cyclically-sensitive sectors such as construction may be relatively more vulnerable to downturns. Remittances to origin countries that have undocumented emigrants in high-income countries may also be vulnerable to a rise in anti-immigration sentiment and stepped-up enforcement efforts in the host countries during an economic downturn. An additional risk may arise from unexpected movements in the exchange rates. The sharp slowdown in remittance flows from the EURO area countries in 2009 in nominal dollar terms is largely due to exchange rate changes. A depreciation of the euro from the current level may result in an even larger decline in remittance flows in US dollar terms, the study says. International migration, the movement of people across international boundaries, has enormous implications for growth and welfare in both origin and destination countries, but contributes, alongside foreign direct investment, to financing the current account deficit. A possible decrease in remittances would affect not only the families, but also the economy.