The World Bank on Tuesday said that Bangladesh would see almost no growth in the inflow of formal remittance in 2024 amid a persistent shortage of dollars hampering the country’s balance of payment.
Growth in formal remittance to Bangladesh is projected to remain flat in the next year, said the WB in its publication on ‘Migration and development brief’.
The WB projected that the country would receive $23 billion in the outgoing calendar year.
Available data from the Bangladesh Bank shows that the country hsd already received 19.88 billion in the first 11 months, January to November, of 2023.
According to the WB projection, the country would receive the same amount of around $23 billion in remittance in 2024 amid a flat growth rate on a number of accounts.
One of the reasons is the lingering impacts of the recent balance of payment crisis that triggered exchange controls and led to parallel market exchange rate premia.
Depreciation and exchange rate management policies have led migrants in Bangladesh, Pakistan and Sri Lanka to take advantage of the black-market premia and transfer funds through informal and formal channels, said the WB.
The WB also pointed out that the growth outlook in the Gulf Cooperation Council countries—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates—will be positive but new job creation for the South Asian job seekers in 2024 is expected to be constrained by low oil prices.
The WB said that remittances remained a critical private financial flow and source of foreign exchange for most South Asian countries, as FDI plummeted by 31 per cent between 2022 and 2023.
As a share of GDP, there was wide variation in remittances across South Asia.
At 27 per cent, Nepal continued to have the highest share of remittances relative to the GDP in South Asia.
In comparison, remittances as a share of GDP ranged around seven per cent in Sri Lanka and Pakistan, and 5.2 per cent in Bangladesh in 2023.
In India, the share of remittances in the economy is only 3.4 per cent, despite its position as the largest recipient of remittances.
The United States continued to be the largest source of remittances, said the WB.
The top five remittance recipient countries in 2023 are India ($125 billion), Mexico ($67 billion), China ($50 billion), the Philippines ($40 billion), and Egypt ($24 billion).