Published in The Daily Star on Friday, 5 September 2014.
Remittance rises 16pc in Aug from year ago
Star Business Report
Inward remittances accelerated 16 percent to $1.16 billion in August, compared to the same month a year ago.
However, remittances fell 22.14 percent in August from a record $1.49 billion in the previous month, data from Bangladesh Bank shows.
The record remittance receipts in July prompted rating agency Moody’s to raise its growth forecast for Bangladesh for this fiscal year to 6 percent from 5.8 percent.
“The rebound in remittance inflows helps consumption and will enable Bangladesh to maintain its relatively strong economic growth performance this year,” Moody’s said in a recent report.
“The improvement is credit positive for Bangladesh (Ba3 stable) because it suggests a bolstering of the sovereign’s external payments position, a key strength of its credit profile.”
The growth was helped by three factors: a rise in migration of skilled workers, legalisation of workers in Saudi Arabia and revision of workers’ pay-scale in the Middle East, said Mustafizur Rahman, executive director of the Centre for Policy Dialogue.
Worker migration to Bangladesh’s regional markets, including Malaysia and South Korea, is on the rise, he said.
The government should look to markets in Europe and the US to earn more remittances from there, Rahman said.
Only 4.5 lakh migrants managed oversees jobs in 2013, down by more than 33 percent from 2012, according to the Refugee and Migratory Movements Research Unit.
Remittance is a significant source of income for the economy and is the second largest source of dollars after exports.
Besides, many families in rural areas completely depend on the money sent by their dear ones toiling abroad.
Remittances augment consumption and investment, and thereby have an important role in stimulating the economy, according to a World Bank study. It helps the economy maintain a stable balance of payments and current accounts.
Inward remittances have helped Bangladesh stimulate economic growth for more than a decade.
Last year, remittance receipts stood at $13.83 billion, accounting for one-tenth of the country’s gross domestic product, according to Bangladesh Bank statistics.