Remittance more likely to grow 8 percent

02 Nov 2020 9:46 AM
Image: Collected
Remittance flow to Bangladesh is likely to grow by 8 percent in 2020, in comparison to that of the previous year.

This will comfortably counter a 22 percent decline forecast by the World Bank earlier amid the coronavirus pandemic.

In April, the multinational lender said that money sent by the migrant employees to Bangladesh was projected at $14 billion in 2020, a decline of about 22 percent as the pandemic brought the global economy to a screeching halt, prompting massive job cuts and return migration.

But on Friday, the Washington-based lender, in its Migration and Development Brief, said remittance to Bangladesh would expand by about 8 percent to $19.8 billion this year.

Bangladesh is forecast to have posted the best year-on-year remittance growth of 53.5 percent among the world's top 49 recipient-countries in the 3rd quarter of 2020.

Mexico, Pakistan, and Bangladesh stick out as exceptions to the pattern as these countries escaped a decline in the second quarter and seem to join up increases in the 3rd, the World Bank said.

In 2020, Bangladesh would retain its position as the world's eighth top remittance recipient country, behind India, China, Mexico, the Philippines, Egypt, Pakistan and Nigeria. Bangladesh received $18.3 billion in remittance in 2019.

"In Bangladesh, the impact of the Covid‐19-induced global financial slowdown has been somewhat countered by the diversion of remittances from informal to formal channels because of the difficulty of carrying money yourself under travel restrictions along with the incentives to transfer remittances," the WB said.

In India, remittances are projected to fall by about 9 percent in 2020, to $76 billion. In Pakistan, remittances would grow by about 9 percent, totalling about $24 billion.

Egypt may see a contraction of 9 percent and the Philippines by 5 percent. Nigeria would also witness negative growth.

More than one crore Bangladeshis stay in about 160 countries. Most of them are low-paid migrant workers in the centre Eastern and Southeast Asian countries who contribute a almost all foreign currency in the state coffers.

Remittance is a significant pillar of Bangladesh's economy and the second-largest source forex after exports, accounting for 5.8 percent of gross domestic product last year.