Fiscal Year 24: No proportional rise in remittance

Staff Reporter :
Despite incentive schemes and thousands of new workers joining the expatriate workers already in various countries overseas, the inflow of remittance to Bangladesh increased only by 2.88 percent in the first half (July-December) of the current financial year of 2023-24.

From July-December of FY24, the remittance inflow was amounted to $10.79 billion.

However, during the same period of time of FY23, it was $10.49 billion, only $300 million more that entered the country.

Experts said if this trend continues the after the end of the current financial year the total remittance earnings will stood around $21to $22 billion which is not much higher than the last two financial years.

The remittance inflow stood at $21.61 billion in FY23 and in FY 22 the total amount was $21.031 billion.

Alarmingly, the remittance earnings are not increasing in proportion to expatriate workers and the initiatives taken by the government like cash incentive.

Experts in the expatriate sector said there is no reason for remittance to fall. The expatriates are sending home more money than before. But as this money is not coming in through legal channels, it is not being recorded. This is harming the foreign exchange reserves.

Remittances began to decline in the first half of 2022 as the Russia-Ukraine war further exacerbated the global economic downturn, they added.

The government has disbursed a second tranche of Tk 10 billion as a cash incentive for scheduled banks in the October-December period of 2023, said sources.

This initiative aims to boost remittance inflows through official channels. Incentive scheme rewards banks for channeling remittances. Introduced in January 2022, it offers an additional Tk 2.5 for every Tk 100 remitted through official channels.

This initiative aims to counter informal ‘hundi’, which can offer higher exchange rates but carry greater harm to the forex stock. Hundi operators may offer Tk 10 or more per US dollar compared to banks, but lack transparency and legal protection.

Over the last 2 year, on an average more than 100,000 workers have been going abroad every month.

However, remittance is not increasing that proportion.

Meanwhile, the income sent home by expatriate workers in July stood at $1.79 billion.

In August, Bangladesh took in nearly $1.6 billion, a 21.47 per cent decline year-on-year. It dropped further in September to $1.34 billion.