Remittance earnings drop 19% in July-August

The inflow of remittance from expatriate Bangladeshis, which maintained an upward trend throughout the last fiscal year even amid the Covid-19 pandemic, dropped by 19% year-on-year in the first two months of the current fiscal year.

The country received $3.68 billion in remittance in the July-August period of this year, down from $4.56 billion in the same period of last year, according to the Bangladesh Bank.

In August this year, remittance growth fell by around 8% to $1.81 billion, compared to August 2020. 

The remittance growth registered 50% year-on-year growth in the first two months of last fiscal year.

The 2% incentive offered by the government on inward remittances coupled with the central bank's initiatives to ensure a time and cost-effective money transfer process encouraged Bangladeshi migrants to send home more money even amid the pandemic crisis, said stakeholders, adding that economic instability in gulf countries amid falling oil prices and job losses of migrant workers, however, have caused the remittance growth to slow down in recent months.

In its financial stability report for the year 2020, the Bangladesh Bank also apprehended that slumps in oil prices might affect Bangladesh as the oil-dependent countries are a major hub for the country's migrant labourers.

Crude oil prices plummeted to $16.6 per barrel on the first day of April 2020, which was $57.5 per barrel on the first day of January the same year. However, it started to recover in the second quarter and reached $52 per barrel at the end of the year, according to the financial stability report.

"Depressed oil prices, in effect, reduced imports and production costs of local producers, which helped to absorb some inflationary pressure in the domestic economy of Bangladesh. On the other hand, it may represent some future implications on remittance from oil-dependent Gulf economies, though Bangladesh received steady flow of remittance during the fall of oil prices," said the report.

The country's remittance earnings reached an all-time high of $24.78 billion last year.

Robust inflows of remittance amid low import expenditure took the foreign exchange reserve at record $48 billion on 24 August.

According to the Bureau of Manpower, Employment and Training, the number of overseas jobs held by Bangladeshi expatriates rose from 1.81 lakh in 2020 to 1.95 lakh during the January-May period of this year.

More than 7 lakh newly recruited Bangladeshis went abroad in 2019, but only 2.17 lakh workers migrated abroad last year, as revealed by data from the Bureau of Manpower, Employment and Training (BMET).

In the first five months of this year, 1.95 lakh Bangladeshis have left home for employment abroad.