August 7, 2020 | Investopaper
A recent study by the Asian Development Bank (ADB) has shown that the contraction in the global economy due to the Corona epidemic will lead to a sharp decline in remittance inflows to Asian countries, including Nepal.
In 2020, ADB estimates that remittances to Nepal will decline by 29 percent, the highest among Asian countries. The ADB study titled ‘Covid-19 Impact on International Migration, Remittances, and Responsible Households in Developing Asia’ shows this. Prior to the ADB’s projection, the World Bank had estimated that remittances to Nepal would decline by 14 percent by 2020.
Fall in remittance in Nepal is the highest among the South Asian countries. ADB has projected that remittance inflows to Bangladesh, Pakistan, India and Sri Lanka will decrease by 27.8 percent, 26.8 percent, 23.5 percent and 21.9 percent respectively.
The lockdown imposed to control the corona has affected the economies of most labor destination countries. ADB says remittance inflows will decrease as workers lose jobs at labor destinations.
According to the ADB, global remittances could fall by 18.8 percent to $108 billion by 2020. It is estimated that remittances to Asia will decline by 54 billion US dollars. ADB has projected the biggest decline in remittance inflows in South Asia. The study estimates that remittance inflows to South Asia could fall by $ 28.6 billion by 2020.
In 2019, remittances worth Rs. 883 billion entered Nepal. Based on that, ADB’s projections show that remittances worth Rs. 629 billion will enter Nepal in 2020.
In the first five months of 2020 alone, remittances fell by about 8 percent. In the first five months of 2019, remittances reached Rs 355 billion, while in the first five months of 2020, remittances reached Rs 327 billion.