Remittance inflow continue to post growth

Remittance inflows in the first two months of the current fiscal year were recorded a growth rate of 8.1 per cent to Rs 165.73 billion, though it is down from the 23 per cent growth in the first month.

“Nepalis abroad sent home back Rs 165.73 billion in the two-month of the current fiscal year despite expectation of remittance drop due to Covid-19 pandemic,” according to central bank’s macroeconomic report released today.

The migrant workers sent home Rs 73.02 billion back during the period mid-August to mid-September – the second month of the current fiscal year, the report reads, adding that Nepali migrant workers sent home Rs 875.03 billion in the last fiscal year. 

Nepal received an all-time monthly high of Rs 100.16 billion in remittance in the last month of the last fiscal year boosting the annual earnings, unlike the expectation of drop due to coronavirus. The central bank – in April – had projected a drop of over 15 per cent in remittance inflow, after the government imposed a lockdown on March 24 to contain the spread of coronavirus. Likewise, the World Bank has also projected a drop of over 14 per cent in remittances in the last fiscal year 2019-20 due to coronavirus. The Central Bureau of Statistics (CBS) too had projected a reduction of Rs 163 billion or over 18 per cent fall in remittance inflow.

However, remittance inflow to Nepal failed all the projections, though the annual remittance inflow witnessed a marginal drop. Economists suspected that the illegal transfers through hundi has been halted due to coronavirus pandemic giving the official channel a boost. 

However, the economists still believe a drop in remittance inflow as the global growth is projected at 5.2 per cent in 2021, a little lower than in the June Update, reflecting the more moderate downturn projected for 2020 and consistent with expectations of persistent social distancing.

According to the macroeconomic report, the number of Nepali workers – institutional and individual-new and legalized – taking approval for foreign employment plunged by 99.2 per cent in the two months of the current fiscal year. Likewise, the number of Nepali workers – renew entry – taking approval for foreign employment decreased by 86.5 per cent in the same period.