Remittances hit 14-month high as labour exports increase
In comparison to the last calendar year, the first seven months of CY22 witnessed the number of migrant workers from Bangladesh increase by 75000
Remittances hit 2-year high as labour exports increase
In comparison to the last calendar year, the first seven months of CY22 witnessed the number of migrant workers from Bangladesh increase by 75000
MEHEDI HASAN/DHAKA TRIBUNE
Meraj Mavis
August 1, 2022 11:12 PM
In July–the first month of FY23, $2.2 billion in remittances came through the banking channel, the highest in the last two years. Economists believe that the increase in labour export in the current calendar year could be one of the reasons behind this.
The month’s remittance inflow registered a 17.56% growth compared to the corresponding month of the last fiscal year, according to the Bangladesh bank.
Besides, the amount is 19.75% higher than June's $1.83 billion.
In July last year, the country welcomed $1.87 billion from Bangladeshi nationals abroad.
Data showed that Bangladeshi expats sent $2.59 billion back home in July 2020.
Regarding this growth, Zahid Hussain, former lead economist of the World Bank's Dhaka office told Dhaka Tribune: “An increase in remittances is a good sign for our economy but now we have to see if it has increased permanently or because of Eid. We have to observe the remittance flow for the next two months.”
The economist further explained: “I think the increase in the number of migrant workers could be for a permanent reason this year because if you notice, you will see that the labour export has increased since the beginning of this year. Last year's total overseas employment numbers exceeded in just a few months of this year which means it's starting to have an effect. If this flow is permanent it will be great news for us.”
“Now the challenge is whether this money will come through banking channels or through informal means. To bring all this money through the banking channel, the management of the dollar market must be fixed quickly,” he added.
On the other hand, this growth of labour export has and will have a negative impact on our dollar market too. This is because of their visa and ticket price.
According to the Bureau of labour Employment and Training’s (BMET) latest data, 6,75,436 workers had gone to different job-destination countries in the last seven months of CY22, which was 6,00,859 in the whole of CY21.
The officials at the central bank believe the upward trajectory will cause the current foreign transaction balance deficit to shrink.
Bangladesh Bank spokesperson Md Serajul Islam said: “Along with expanding incentives, the government is providing policy support to encourage expatriates to send remittances (through banking channels).”
According to him, the national bank was also encouraging the non-resident Bangladeshis to send remittances while the higher price of dollars in the country bolstered the efforts.
"The expatriates have sent $2.2 billion in remittance as they received a better dollar price," he added.
Bangladesh saw an inward remittance slump by 15.12% to $21.03 billion year-on-year in 2021-22 after growing by more than 36% to $24.78 in 2020-21.
