Global economic crisis hits remittance inflow

Though, the number of Nepali migrant Nepali workers going for blue-collar jobs abraod has not decreased, the remittance inflow has slowed down.
According to Nepal Rastra Bank (NRB)'s macroeconomic report, in the first nine months of the current fiscal year remittance has shown slow growth of 9.6 per cent amounting to Rs 164.929 billion. In the corresponding period of the last fiscal year, it had increased by 60.3 per cent.
However, the number of migrant workers has touched 202,794 in the first nine months of this fiscal year. The number of Nepali migrant workers going abroad was 175,958 in the same period last fiscal year.
Within the first nine months of the fiscal year 2009-10, remittance escalation rate has gone down from the growth rate of 35.3 per cent in the first month – mid-august -- to 9.6 per cent in mid-April. While in the last fiscal year, remittance increment had gone up from 31.2 per cent to 42.5 per cent at the end of the fiscal year 2008-09.
Meanwhile, in the first month of the current fiscal year, the remittance had registered a growth of 35.3 per cent against the growth of 31.2 per cent in the corresponding period of last fiscal year.
In mid-September 2009, increment in remittance went down to 19.7 per cent since then it has been fluctuating – reaching 6.6 per cent in mid-November and it again increased to 10.4 per cent in mid-December from there it rose to 13.6 per cent in mid-February 2010. However, in mid-March remittance has gone down to 9.9 per cent.
International Monetary Fund (IMF) has also estimated the slowdown of remittance growth rate to an average of 11 per cent. "Since most of the destinations for foreign employment is still bearing the burnt of international economic crisis, our remittance is not growing as much as it has to,” said NRB’s spokesperson Gopal Kafle. "Besides, there is a speculation doing rounds that workers have been holding the cash for investment purpose instead of sending it back home," he said adding that the central bank is also suspicious that remittance money is being invested somewhere outside Nepal so that the incomes earned from abroad is not visible in the formal accounts. Kafle also blamed informal channels for the remittances’ slow growth in comparison to that of last year.
This retarded growth rate of remittance has affected the Nepal’s Balance of Payments (BoP) which is at the deficit of Rs 22.1 billion in the first nine months of the current fiscal year.
Similarly, at the time when there is liquidity crunch in the country, snail pace of remittance growth is also posing a great problem.