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KATHMANDU, Aug. 26 (Xinhua) -- Nepal recorded a decreasing growth rate in remittance inflow in the last fiscal year 2015-16 as the number of Nepalese workers leaving for foreign employment dropped massively, Nepal's central bank said.
Nepal Rastra Bank (NRB), the central bank of the country, said in its latest Macro-Economic Financial Situation Report on Friday that the growth rate of remittance came down to 7.7 percent in mid-July 2016 when fiscal year ended compared to 27.3 percent growth rate observed in mid-August 2015, the first month of the last fiscal.
The Himalayan nation received a total of 6.18 billion U.S. dollar (Nepalese rupee Rs665.06 billion) in remittance in last fiscal year. In the previous fiscal year 2014-15, Nepal registered growth of 13.6 percent in remittance inflow.
The deceleration in remittance growth rate, according to experts, is a warning sign for Nepal, whose economy is heavily dependent on remittance sent by migrant workers. The remittance's size is 29.6 percent of the gross domestic product (GDP) of the Himalayan nation.
"The decreasing growth in remittance inflow over a year is a cause of concern because a continued deceleration would undermine Nepal's capacity of import financing," said Nara Bahadur Thapa, chief of research department at NRB.
Nepal's export earning stood at just 652 million U.S. dollar in the last fiscal while the country imported goods worth 7.19 billion U.S. dollar, according to NRB. So, remittance fulfills majority of foreign exchange required for import financing.
"Remittance is one of the key factors for recent decline in rural poverty in Nepal and the continued deceleration in remittance growth could have serious impact on poverty reduction efforts," said Thapa.
Decrease in remittance growth coincides with slump in the flow of Nepalese migrant workers in the last fiscal year. Nepalese workers departing for foreign employment slumped by 8.4 percent to 418,713. The departure to Malaysia, traditionally the largest work destination for Nepalese workers, slumped to 60,979 in fiscal 2015-16 against 202,828 in the previous fiscal.
Malaysia stopped taking foreign workers in February but the decision was partly revised in May by allowing foreign workers in the areas of manufacturing, construction, plantation and furniture-making industries which were facing a major shortage of workers.
On the other hand, economic slowdown in Saudi Arabia as a result of decreased oil price has also been a cause of concern for Nepal because companies there have started to lay off foreign workers.
With Malaysia not taking in foreign workers like before, oil rich Gulf kingdom emerged as the largest work destination for Nepalese workers in the last fiscal year as it received 138,529 Nepalese workers commanding 30.8 percent of total Nepalese migrant workers.
Secretary at the Ministry of Labour and Employment Bishnu Prasad Lamsal said that the situation in Saudi Arabia was not as alarming as it has been reported in the media. "I hope that Malaysia lifting ban on foreign workers in certain areas would also result in higher outflow of Nepalese workers and increase remittance inflow in the country," he said. Enditem
