Economists and bankers fear further decline in coming months due to the Covid-19
Remittance inflow declined by 11.79% year-on-year to $1.28 billion in March, as coronavirus pandemic forced countries that employ Bangladeshi workers to enforce lockdowns in an effort to halt the spread of the novel virus.
The inflow of remittance also came down by 11.43% than February as expatriate Bangladeshis sent $1.45 billion in remittance in the previous month, according to the data of Bangladesh Bank (BB).
Bankers say restriction on international travel, enforcing complete lockdown and shutting down remittance houses, banks and business centers in countries where major Bangladeshis are employed are the key factors behind the slump of inbound remittance.
The BB is yet to prepare the list of countries that sent lower remittance in the previous month, but they predict remittance from gulf countries might go down.
Remittance from Saudi Arabia and the UAE, the top two sources of remittance for the country, contracted in January and February.
Many expatriates already returned back home due to the deadly virus. As a result, the inflow of remittance further will drop significantly in future, they add.
Expatriate Bangladeshis sent $1.64 billion in January, which was 3.13% lower than December 2019.
The figure further dropped in February, as expatriates sent $1.45 billion, down by 11.35% from January, according to Bangladesh Bank data.
However, Remittance inflow increased by 16.13% to $13.78 billion in July-March period of the current fiscal year, compared to the same period of last fiscal year.
Policy Research Institute Executive Director Ahsan H Mansur have said expatriate Bangladeshis in Germany, Spain, Italy, France, the United States and the United Kingdom are now trying to protect themselves from the ongoing crisis owing to deadly coronavirus because those countries are now under lockdown. As a result, it is difficult for them to send money to their relatives, he adds.
“On the other hand, the coronavirus situation in the Middle East is not good. The price of crude oil has fallen in the world market owing to the virus. Most of the expatriates will lose their job due to the declining price,” Ahsan, also the Chairman of BRAC Bank, says further.
Mansur says already many expatriates have returned from abroad and a portion of them may not go back, which will adversely affect to remittance inflow in the coming months.
“New manpower exports have also stopped for few months. We do not know about how long the situation will continue. As a result, there is no good news for us. Remittance inflow will be impacted badly for the long time but there is nothing to do at this moment.”
Md Abdul Halim Chowdhury, Managing Director and CEO of Pubali Bank Ltd says remittance inflow began slowing down and inflow will drop alarmingly in the coming days due to global economic stagnation felt as a consequence of coronavirus.
“We do not have adequate supply of US dollars anymore due to the declining trend of remittance,” he adds. If the pandemic situation persists in the United States, the United Kingdom and in the United Arab Emirates, remittance inflow will fall significantly,” he cautions.
Expatriate Bangladeshis sent $16.41 billion in the 2018-19 fiscal year.
In the first nine months of the current fiscal year, inbound remittance registered above 16% growth, thanks to the 2% incentive scheme of the government.