More than €8.2 billion were sent from Italy in 2022, a growing and essential flow for developing economies.
There are developing countries that cannot do without the money they receive from people who have migrated abroad in search of a better job, more opportunities, or to escape wars or serious social conflicts. In some cases, the flow of money sent home by migrant workers exceeds the flow of international aid, and represents an essential source of financing to support the most fragile economies.
The technical term used to call this money is “remittances”, which are sent to the family of origin and also to contacts and organizations in need of assistance. In Italy, remittances are constantly analyzed by the Bank of Italy, which publishes it every year data An update on the countries the money is being sent to.
Data is obtained from tracking funds transferred through bank transfers, from the post office and from operators Money transfer Such as Western Union or MoneyGram: they are the only formal and official channels for money transfer. but Out So too are the informal channels through which an untraceable part of the money passes, for example when a worker takes a certain amount of banknotes with him on his short return to his country of origin: the closer this is, the higher the share of the unseen remittances. According to estimates by the Bank of Italy, informal channels conceal between 10 and 30 percent of the total flow.
In 2022, remittances sent from Italy amounted to more than 8.2 billion euros, an increase of about 500 million over the previous year. And in the first quarter of 2023, almost two billion euros were sent abroad. The country with the most money sent in 2022 is Bangladesh: nearly €1.2 billion, up from 873 million in 2021. In second place is Pakistan with €699 million and in third place is the Philippines with €623 million. Followed by Morocco, Romania, Senegal and India.
results a reconnaissance, They say, conducted by the Center for International Policy Studies (CESPI) in 2021, that people send money on average five times a year, with an average amount of around 600 euros. Female workers send money more and more frequently than men.
In addition to outgoing remittances, there is also a less significant share of inward remittances, the money that Italian workers send home abroad. The balance of remittances in Italy has turned negative since the mid-1990s, when an increase in the number of migrant workers led to outgoing remittances now exceeding the remaining share of inward remittances. The wide gap between the two cash flows also depends on different levels of well-being: foreigners who work in Italy generally come from less affluent families than Italian immigrants.
The trend of remittances sent abroad has now consolidated and has grown significantly in recent years, also due to the pandemic. In the face of increasing unemployment and instability due to the restrictive measures taken to reduce infections, a decrease in remittances could have been expected, but this has not been the case. In fact, this flow of money has what is called a countercyclical trend, that is, it tends to increase in the wake of crises, wars or natural disasters. As can be seen from the graph, after a slight decline in the first quarter of 2020, the share of funds sent abroad increased: in the second quarter of 2020, the total value of remittances sent from Italy amounted to about 2 billion euros.
According to one interpretation subscriber According to many studies, the uncertainty caused by the pandemic has led many people to send their savings home while waiting to understand how things are going. Moreover, during the pandemic, the use of official traceable channels increased due to the impossibility of travel due to restrictions: banks, post offices and agencies. Money transfer It was included in the basic services and was not subject to restrictions. Among other things, money transfer has become cheaper and therefore more accessible in recent years. Prior to 2014, a fee of around 7% applied to a €200 transfer, which dropped to 5.5% in the fourth quarter of 2022.
More than a fifth of remittances are sent by foreigners working in Lombardy. The second region is Lazio, followed by Emilia-Romagna, Veneto and Tuscany. In general, Italian regions with more job opportunities welcome more foreign workers who consequently send higher remittances. In the following map, it is possible to see the distribution of remittances at the county level: Clicking on each county separately allows you to see the countries to which the largest number of funds are sent.
International surveys show that remittances are usually spent on consumer goods, i.e. purchasing food, clothing and groceries. One of the main benefits of remittances is the possibility given to the family of origin to move out of poverty, but also in the long term to stabilize income and make investments. Relying on remittances allows you to plan for the future with greater confidence and ensure better health and education for family members. Opportunities to buy a home and receive a pension are also increasing. Many studies link remittances to lower mortality rates, increased birth rates, and general improvements in living conditions.
There are also some negative effects, albeit very marginal ones. For example, remittances can help create a culture of dependency that limits participation in the world of work and can limit economic growth. Another problem is that households, as economic capacity increases, often tend to buy non-essential goods which consume a lot of energy produced abroad, and thus have less impact on their countries’ economies.
The following graph shows the trend of remittances sent from Italy to foreign countries. Simply click on the drop down menu to select your country. As can be seen, the share of remittances to Russia decreased significantly after the invasion of Ukraine, also due to international sanctions.
Another interesting trend concerns China, to which remittances have declined significantly in recent years. This is a phenomenon that can be explained through some investigations conducted by various Italian regions, which helped identify a proven system of tax evasion. In 2010 throughout Italy They were denounced 581 people are accused of illegally transferring 4.5 billion euros to China.
14 agencies were also involved in the investigation Money transfer and 207 companies. The Florence Public Prosecutor’s Office, from which the investigation began, requested that 297 people be charged. The trial began, however, in 2018 took over The statute of limitations for almost all defendants. Meanwhile, since the investigation began, remittances to China have risen from more than 500 million euros annually to 23.3 million in 2022.
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