December 9: At a time when there are signs that the growth of remittance inflow in Nepal has slowed down, the country has been observing an increase in remittance outflow. Statistics published by the Nepal Rastra Bank (NRB) shows remittance outflow has amounted to Rs 1.31 billion in the first three months of the current fiscal year 2019/20, up 21.2 percent from Rs 1.8 billion in the corresponding period of FY2018/19. The amount was sent back home by foreign workers working in various enterprises and institutions in Nepal. According to NRB, annual remittance outflow from Nepal amounts to over Rs 10 billion in the recent years. In FY2018/19, the outflow amounted to Rs 10.50 billion, up 86 percent from Rs 5.80 billion in FY2017/18.
NRB, however, doesn’t have data to exact recipient countries of the money remitted from Nepal. But, the central bank’s initial estimations put India as the main country to receive remittance from Nepal. According to NRB officials, this situation is likely as Nepal has been a home to a large number of Indian migrant workers. Dr Gunakhar Bhatta, executive director at NRB thinks the amount of the remittance outflow from Nepal as obvious. “Foreign workforce is also necessary to aid in the country’s economic growth. Nepal is observing a phase of acceleration in its economic growth. Therefore, this outflow of remittance is understandable,” he says adding that the outflow would impact in a situation where there is contraction in the country’s economic growth. The presence of foreign workers in Nepal, in both formal and informal sectors, has grown in the recent years. Foreign joint venture companies, hotels, airlines and industrial enterprises are among the major formal sector institutions with growing number of foreign employees. In the meantime, foreign workers working in the informal sectors of Nepal have also started to remit money through channels which has led to the increase in remittance outflow from Nepal, according to NRB officials. NRB Executive Director Bhatta informed that the central bank has been preparing to conduct a study on how money is being remitted by foreign informal sector workers working in Nepal.
Nepal is among the world’s major remittance recipients. The country is the world’s 19th largest recipient of remittance with the inflow amounting to over USD 8 billion yearly. According to the World Bank, Nepal received USD 8.1 billion in 2018. However, the inflow declined by 5 percent in the first three months of the current fiscal year compared to the corresponding period of the last fiscal year.