Ukraine labor remittances reach USD 5.5 bln in 1H19

The remittances of Ukrainian laborers abroad rose 5%
yoy to USD 5.5 bln in 1H19, the National Bank of Ukraine (NBU) reported on
Sept. 25. According to the NBU estimate, around half of remittances were
transferred through informal channels, while the rest occurred via banking
transfers and international money transfer systems. The 1H19 remittances
accounted for about 8.6% of GDP.

Around one-third of labor remittances come from
Poland, followed by the Czech Republic, Russia and the U.S.

Evgeniya Akhtyrko: The
remittances of labor migrants are essential for Ukraine’s economy as they
restrain the enlargement of the current account (C/A) deficit amid a negative
trade balance. Moreover, the money transfers are apparently contribute to the
ongoing appreciation of the Ukrainian national currency. The current fast
growth in private consumption implies that a big chunk of money transfers
immediately moves to the domestic ForEx for exchange.