Economics of remittance

Remittance as a source of income and foreign exchange is unsustainable and vulnerable in the long run.

Nepal has huge potential in the tourism, power (hydroelectricity), service and agriculture sectors. However, the country’s economic development has remained low. A low economic growth rate, a high poverty level, primitive and unscientific agriculture production, unemployment, low industrial development and a trade deficit, among others, have hindered progress. Despite these challenges, remittance, a significant foreign exchange source which covers around 25 percent of Nepal’s GDP, has sustained the economy for the past few decades. It has stabilised Nepal’s payment balance and financed nearly 84 percent of the trade deficit. According to Nepal Rastra Bank’s annual data for 2022-23, the remittance inflow stood at $9.33 billion in Nepal.