Published in The Business Standard on 3 October 2020
Remittance inflow sees 46% growth in September
The country received $6.71 billion in remittance in the first three months of the current fiscal year, up by 48.57% compared to the same period of last year.
Migrant Bangladeshis working in various countries of the world sent home $2.15 billion in September this year, registering a 45.64% year-on-year growth compared to $1.47 billion remitted in the same month last year.
The remittance received last month was around 10% higher than $1.96 billion received in August this year. The figure was $2.59 billion in July.
According to the latest data from the central bank, the country received some $6.71 billion in remittance during the first three months (July-September) of the current fiscal year.
Remittance inflow witnessed a 48.57% rise in this period compared to $4.52 billion received in the July-September period of last year.
The continuous rise in Bangladesh’ remittance earnings amid the coronavirus pandemic has come as a respite for the families of the migrant workers, as well as for the distressed economy.
However, this increasing trend in remittance inflows, especially in the current situation, has taken experts by surprise.
Expressing his astonishment, Dr Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue, told The Business Standard, “If remittance inflows increased at such a high rate compared to previous months, there is reason to be doubtful about the figures.
“This is because a significant number of migrant workers have come back over the last few months and the ones who are staying abroad cannot earn as they did before. Most of them cannot do overtime, while some are not even getting their full salaries.”
However, he observed that the recent surge in remittance inflows might be a result of the government’s payment of 2% cash incentives on remittance, as migrants are now incentivized to send money home through legal channels.
If the increasing trend continues for the next several months, Golam Moazzem recommended that the central bank conduct inspections to find out if any unlawful money transfers are taking place.
Western Union’s Country Manager for Bangladesh Noor Elahi said, “Bangladesh introduced the incentive on remittance at a time when the country really needed it. Now other remittance-receiving countries are thinking about introducing such incentives.”
Elahi also serves as Western Union’s country manager for Sri Lanka and Maldives.
The government introduced incentives on remittance from in the fiscal year 2019-20. That year, the country received an all-time high $18.20 billion in remittance, which was around 11% higher than that received in the previous fiscal year.
Riding on remittances, the country’s foreign exchange reserves have recently increased to $39 billion.
Recently, Fitch Ratings Inc, a US-based credit rating agency, forecast that the annual remittance inflow for five Asian countries – Bangladesh, India, Pakistan, Sri Lanka and the Philippines – may drop by 12% on an average, a threat of losing a sizeable amount of remittance earnings this year due to the Covid-19 pandemic.
Earlier, the World Bank and the Asian Development Bank projected a 20% fall.
According to data from the central bank, the country received $15.51 billion in remittance during the January-September period of this year. The figure was $13.44 billion in the same period of last year.
However, total receipt in the 2019 calendar year was $18.35 billion.
Seeking anonymity, a senior official of the Bangladesh Bank said, “We hope this rising trend in remittance inflows will continue in the future, as Covid-19 fears are withering away gradually.”
The country will receive more than $20 billion this calendar year if the current growth rate continues in the remaining three months, he hoped.