Remittance inflow slows down

The worker's remittance inflow to Nepal has slowed down in recent months.
The remittance increased by only 12.6 per cent to Rs 143.95 billion in the first eight months of the fiscal year, according to the central bank, whereas in the same period last year the remittance inflow had increased by a whopping 65.3 per cent.
President of Nepal Remiters Asociation (NRA) Chandra Dhakal agreed that the remittance inflow has slowed down. "But the remittance inflow has not decreased," he added.
Dhakal attributes the slowdown of remittance due to the post-recession impact. Last year, the major Nepali migrant workers' destination countries were hit by the recession hard. "Though, the migrant workers outflow has improved in recent months, last year, we witnessed a slowdown in the outflow," he said adding that the reduction in working hours in the host country has also hit the remittance business.
"On top of that the migrant workers might be holding the money back in the host country as the dollar is weak now," Dhakal said.
The country has received Rs 209.69 billion as remittance in the last fiscal year. The remittance -- also considered a lifeline of Nepali economy -- contributed 21 per cent to the gross domestic product (GDP) in the last fiscal year.
Nepali economy has been dependent on the earning from remittance in recent years, which is not a healthy sign for the economy. However, until our exports sector improves, remittance is one of the major foreign currency earners after tourism.
Last fiscal year, remittance had helped the Balance of Payment (BoP) to remain in surplus, which has been in deficit in recent months.
International Monetary Fund (IMF) has estimated that remittance inflow to the country will slow down at around 12 per cent in the current fiscal year. The current trend also suggests that the average remittance inflow in the current fiscal year could not exceed 12 per cent. Last fiscal year's average rate of increment in remittance inflow was 47 per cent.
In the first month of current fiscal year remittance had increased by 22.5 per cent while in the same period last fiscal year it had posted only 21 per cent increment. However, it increased to a whopping 59.4 per cent in the second month of last fiscal year. This fiscal year's second month saw an increment of only 19.7 per cent.
Dhalak is hopeful that the remittance inflow will increase in the coming months. "The outflow of migrant workers has started picking up and it will help remittance inflow," he said adding "But it will take three to four months."