THE IMPACT OF REMITTANCES ON THE BALANCE OF PAYMENTS DYNAMICS IN SOUTHEAST EUROPEAN COUNTRIES

Remittances are crucial and growing source of external financing in many countries of Southeast Europe. They have grown faster than the private capital flows and official aid. Southeast Europe is one of the most dependent regions on remittances flows. They have proven to be more stable than other private capital funds, which make them good absorbers of economic and financial crises. The purpose of this paper is to analyze the impact of remittances in ensuring balance of payments stability in Southeast Europe. This capital flows offset chronic balance of payments deficits by reducing the shortage of foreign exchange and have a more positive impact on the balance of payments than other monetary flows. The paper has three parts. The first part discusses the impact of remittances on the balance of payments adjustment in SEE countries. Second part deals whit levels and trends of remittance flows in the region of Southeast Europe. Third part analyses negative effects of remittances on balance of payment in this countries.