Bangladesh's remittance inflows have been projected to increase by 2 percent in the current fiscal, says the World Bank.
The latest estimate of remittance inflow was published in the multilateral lender's Migration and Development Brief on Wednesday.
The WB made the estimation on Bangladesh’s positive growth that despite an expected negative growth in South Asia which on average is poised to decline by 4.4pc.
The report said Bangladesh received $22.2 billion in remittances in 2021 despite the economic stagnation caused by Covid-19 for providing regular incentives and this year (FY2022) may receive 2 percent more remittances than that of the previous fiscal.
Food inflation, driven by the ongoing Russia-Ukraine War, the Gulf countries is inevitable and will dampen South Asian migrants' remitting potential in 2022 and 2023.
However, the country's monthly remittance inflow has seen a decline over the past eight months except for a 24 percent spike in March due to Ramadan.
Bangladesh has been ranked seventh among the top 10 low-and middle-income remittance recipient countries in the world for 2021.
Whereas, India retained its first position with $89 billion followed by Mexico, $54 billion, and China, $53 billion.
However, the country ranked third on the list among its South Asian neighbours.
As per the report's findings, Bangladesh's share of remittance earnings to the Gross Domestic Product (GDP) reached reach 6.2 percent in 2021.
Meanwhile, in 2022, remittance flows to low and middle-income countries (LMIC) are expected to increase by 4.2 percent to reach $630 billion.
An 8.6 percent growth was registered in 2021 with remittance flows reaching $605 billion.
According to Bangladesh Bank (BB) data, remittance earnings in the July-April period of the current financial year stood at $17.3 billion.
Michal Rutkowski, Global Director of the Social Protection and Jobs Global Practice at the World Bank, said, “The Russian invasion of Ukraine has triggered large-scale humanitarian, migration and refugee crises and risks for a global economy that is still dealing with the impact of the COVID pandemic.”
“Boosting social protection programs to protect the most vulnerable, including Ukrainians and families in Central Asia, as well as those affected by the war’s economic impact, is a key priority to protect people from the threats of food insecurity and rising poverty.”
Dilip Ratha, lead author of the report on migration and remittances and head of KNOMAD, “On the one hand, the Ukraine crisis has shifted global policy attention away from other developing regions and from economic migration. On the other hand, it has strengthened the case for supporting destination communities that are experiencing a large influx of migrants.
“As the global community prepares to gather at the International Migration Review Forum, the creation of a Concessional Financing Facility for Migration to support destination communities should be seriously considered. This facility could also provide financial support to origin communities experiencing return migration during the COVID-19 crisis.”
However, remittances to South Asia grew 6.9 percent to $157 billion in 2021. Though large numbers of South Asian migrants returned to home countries as the pandemic broke out in early 2020, the availability of vaccines and the opening of Gulf Cooperation Council economies enabled a gradual return to host countries in 2021, supporting larger remittance flows.
Better economic performance in the United States was also a major contributor to the growth in 2021.
Remittance flows to India and Pakistan grew by 8 percent and 20 percent, respectively. In 2022, growth in remittance inflows is expected to slow to 4.4 percent.
Remittances are the dominant source of foreign exchange for the region, with receipts more than three times the level of FDI in 2021.
South Asia has the lowest average remittance cost of any world region at 4.3 percent, though this is still higher than the SDG target of 3 percent.