Nepal sees robust growth in remittance inflow despite Covid-19 pandemicMoney sent by Nepali migrant workers increased by a surprising 23 percent in the first month of this fiscal year, convincingly refuting forecasts that the income of Nepal migrant workers would crash.
After a marginal 0.5 percent drop in the last fiscal year that ended mid-July, remittance inflows to Nepal increased by a surprising 23 percent, convincingly refuting forecasts that the income of Nepal migrant workers would crash due to the coronavirus pandemic affecting the global economy.
According to the Nepal Rastra Bank macroeconomic report released on Friday, in the first month [mid-July to mid-August] of the current fiscal year 2020-21, Nepal received Rs 92.71 billion in remittance earnings.
Nepali migrant workers sent home Rs 875.03 billion in the last fiscal year. Nepal received an all-time high remittance of Rs 100.16 billion during the last month of the fiscal year (mid-June to mid-July) that boosted the overall remittance earning.
With the coronavirus wreaking havoc on the global economy, remittances to Nepal was forecast to drop significantly.
In April-end, a little over a month after the lockdown was imposed on March 24, the Nepal Rastra Bank had projected a drop of over 15 percent in remittances in the last fiscal year 2019-20. In the same month, the World Bank also projected remittances to go down by 14 percent. Similarly, the Central Bureau of Statistics also projected a reduction of Rs163 billion, or over 18 percent.
“It’s the exact opposite of what was projected and expected,” said Gunakar Bhatta, spokesperson for the country’s central bank. “We have also estimated that informal trade has decreased by the restrictions and lockdowns that eventually have helped remittance come through formal channels.”
According to Bhatta, remittance in large chunks is coming through formal channels unlike in the past.
“Besides, manufacturing activities in many developed countries, including the Gulf nations, have already resumed where the majority of Nepalis are working,” he said. According to him, millions of Nepalis have been working in different overseas destinations.
“It was estimated that tens of thousands of Nepalis would return home. But that didn’t happen,” said Bhatta.
Based on data from the Covid-19 Crisis Management Centre, as of September 25, more than 76,000 stranded Nepalis have been brought home, most of them from labour destinations.
Bhatta said that as Nepal’s key festival is approaching, remittance inflow may see a rise in the second month as well. “People will send money to their families to celebrate festivals,” Bhatta, who is also the chief of the central bank’s research department, told the Post.
The central bank said that in US Dollar terms, remittance inflows increased 14.5 percent compared to an increase of 0.7 percent in the corresponding period of the previous year.
It said that the number of Nepali workers (institutional and individual-new and legalized) taking approval for foreign employment decreased 99.2 percent in the review period. It had decreased by 19 percent in the same period of the previous year.
The number of Nepali workers (renew entry) taking approval for foreign employment decreased 80 percent in the review period.