Despite projections of a massive downfall in remittances due to the Covid-19 pandemic, encouraging signs are emerging that the downturn might not be as bad as predicted.
Nepal Rastra Bank had projected a drop of over 15 percent in remittances in the current fiscal year which ends in mid-July, according to a senior official at the central bank. The World Bank in April had projected remittances to go down by 14 percent in the current fiscal year and the Central Bureau of Statistics, the same month, projected a reduction of Rs163 billion, or over 18 percent, compared to last fiscal year when the country received a total of Rs879 billion sent home by Nepalis working abroad.
“After a sharp drop in April, there has been a noticeable improvement in remittances,” said Gunakar Bhatta, spokesperson for the central bank. “Our projection is that remittances could decline in the range of 10 percent this fiscal year.”
According to the statistics from the central bank, the country received remittances amounting to Rs34.5 billion in Chaitra (mid-March-mid-April), compared to Rs71 billion in the same month the previous fiscal year.
But from mid-April to mid-May, the figure improved to Rs53.9 billion and according to preliminary figures from the central bank, remittances from mid-May to mid-June grew to Rs62 billion, according to Bhatta.
“Major reasons behind the surge in remittance after mid-April may be relaxations in lockdowns in the host countries and increased economic activities there,” he said. “Some may also have sent home money that they had failed to during the lockdown.”
The central bank expects a stable inflow of remittance to continue into the next fiscal year.