Remittance in Bangladesh Economy

Development Dynamics of Remittances in Bangladesh

Md. Noor Solaiman Jewel, Senior Executive, The Premier Bank Limited

banglanews24.com

Remittance inflows hit a decade high of $12.17 billion in the just concluded 10-year high, offering the government a much-needed cushion against dwindling foreign exchange reserves and exchange rate volatility.

Now a day’s remittance has kept the economy of Bangladesh more dynamic. Remittance inflows in the economy of Bangladesh are getting larger every passing year, matching with the increasing external demand for its manpower.

The ensuing development impacts of remittances, as a means of transfer of wealth, on socioeconomic factors are increasingly viewed with importance. Remittances have helped improve the social and economic indicators like nutrition, living condition and housing, education, health care, poverty reduction, social security, and investment activities of the recipient households.

The relative weight of remittances has also increased against most of the macroeconomic variables alongside the contribution to GDP. Moreover, Bangladesh has been able to avoid any serious in Balance of Payment’s current account, although it has persistent merchandize trade deficits.

Not only that, the export tradable sector has thus far remained unaffected from the Dutch Disease effects of remittances. Now a day’s remittance has kept the economy of Bangladesh more dynamic.

Due to a wide mismatch between exports and imports, trade deficit registered for the first month of the current fiscal year was $615 million, a 127 percent rise from $271 million a year ago, (Bangladesh Bank data shows). Exports grew by only 4.77 percent in July, whereas imports shot up by 17.60 percent, according to the data. Foreign direct investment recorded in July was $174 million, 49 percent higher than $117 million in the same month a year ago. Remittance in July was 18 percent higher at $1.18 billion from $1 billion a year ago.

Remittance receipts stood...