Economy

Volume of remittances to Ukraine by labor migrants in 2018 could reach $9.3 bln

The volume of remittances to Ukraine by migrant workers in 2018 could amount to at least $9.3 billion, Deputy Head of the National Bank of Ukraine (NBU) Dmytro Solohub has stated.

"We expect that labor migration will decline in the medium term, but before it happens, it will grow for another two or three years. In January we expected private remittances to grow from $7.3 billion in 2017 to $7.8 billion in 2018. Now we are reviewing the outlook for the volume of money transfers taking into account the new methodology for their valuation and will publish it together with the rest of macroeconomic forecasts in April. If according to data calculated on the basis of the new methodology Ukraine in 2017 received $9.3 billion in private remittances, then the sum this year will be no less, but not much more," he told journalists.

He noted that in the short term the growth in the number of labor migrants positively influences the balance of payments, but in the medium term it is a significant risk factor.

"One of the greatest medium-term risks for Ukraine's economy is migration, especially in conditions of not very significant growth in labor productivity and other factors of production. That is, the increase in wages stimulated by emigration and the improving of social standards creates pressure on the labor market, profitability of enterprises, macroeconomic indicators, including inflation. We can say that in the short run the positive sides (from the growth of labor migration) predominate, because these positively influences our balance of payments, but in the medium term it is a significant risk factor," Solohub said, adding that the upward trend in labor migration is a signal to the improvement of working conditions in Ukraine.

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