Increasing hundi, and suspected capital flight has pulled the remittance inflow by 2.3 per cent in the first four months of the current fiscal year 2019-20 compared to the same period of the last fiscal year 2018-19.
According to the ‘Current Macreconomic and Financial Situation of Nepal’ released by the central bank, Nepal received a total of Rs 304.97 billion in remittances in the first four months of the current fiscal year 2019-20, down by Rs 7.29 billion from the same period in the last fiscal year 2018-19.
The remittance inflow used to increase during major festivals like Dashain, Tihar and Chhath when Nepalis working overseas send more money to their families but this year, the trend has seen reversal as the remittance inflow declined even during the festival months. However, the number of migrant workers leaving the country has been increasing, according to the central bank report. “The number of Nepali workers – both institutional and individual, and also new and legalised, who migrated for foreign employment – increased by 5.6 per cent in the first four months of the current fiscal year.”
Economists say that the decline in remittances is a result of a higher base figure and a fall in the number of outbound workers last year.
Earlier, more remittances used to come through the formal channel after the government cracked down on Hundi and gold smuggling as well as brought reforms to the customs sector, but the trend seems reversed, economists say, adding that the International Monetary Fund (IMF) has forecast the global growth of remittance for 2019 at 3 per cent, the lowest level since 2008-09. “Similarly, growth in many labour-receiving countries has also remained low. It could be a factor which has either reduced the demand for workers or wages for workers.”
According to the central bank, there was a remittance growth of 36.4 per cent in the four months of the last fiscal year 2018-19 compared to the same period in a year ago in 2017-18.
Money transfer companies, however, claim that the drop in the remittances is mainly due to government ban on migrant workers to Malaysia for over a year. Malaysia is a major destination for Nepali workers. But the government has reopened Malaysia recently.
According to the ‘Current Macreconomic and Financial Situation of Nepal’ released by the central bank, Nepal received a total of Rs 304.97 billion in remittances in the first four months of the current fiscal year 2019-20, down by Rs 7.29 billion from the same period in the last fiscal year 2018-19.
The remittance inflow used to increase during major festivals like Dashain, Tihar and Chhath when Nepalis working overseas send more money to their families but this year, the trend has seen reversal as the remittance inflow declined even during the festival months. However, the number of migrant workers leaving the country has been increasing, according to the central bank report. “The number of Nepali workers – both institutional and individual, and also new and legalised, who migrated for foreign employment – increased by 5.6 per cent in the first four months of the current fiscal year.”
Economists say that the decline in remittances is a result of a higher base figure and a fall in the number of outbound workers last year.
Earlier, more remittances used to come through the formal channel after the government cracked down on Hundi and gold smuggling as well as brought reforms to the customs sector, but the trend seems reversed, economists say, adding that the International Monetary Fund (IMF) has forecast the global growth of remittance for 2019 at 3 per cent, the lowest level since 2008-09. “Similarly, growth in many labour-receiving countries has also remained low. It could be a factor which has either reduced the demand for workers or wages for workers.”
According to the central bank, there was a remittance growth of 36.4 per cent in the four months of the last fiscal year 2018-19 compared to the same period in a year ago in 2017-18.
Money transfer companies, however, claim that the drop in the remittances is mainly due to government ban on migrant workers to Malaysia for over a year. Malaysia is a major destination for Nepali workers. But the government has reopened Malaysia recently.
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