Remittance from UAE, UK surges in July-March FY24; declines from Saudi, US

Remittance inflows have surged by around $1 billion during the July-March period of FY24 compared to the corresponding period of the previous fiscal year, driven by significant increases from countries such as the UAE, Singapore, and the UK, while experiencing declines from the USA and Saudi Arabia.

Among the countries, the UAE has witnessed a significant increase in remittance outflows to Bangladesh, reaching $3.27 billion in the first nine months of FY24, compared to $2.20 billion during the same period in the previous fiscal year. This represents a 48% increase, totalling more than $1 billion.

Consequently, the country moved from third place in the last fiscal year to first place in the current fiscal year on Bangladesh's list of top remittance source countries.

Stakeholders have linked the rise in remittances from the UAE to the "potential repatriation of laundered money".

On the other hand, they attribute the decline in remittance inflows from countries like Saudi Arabia and the USA to the rising cost of living for expatriates, which leads to a decrease in their savings from income.

According to the Bangladesh Bank, remittance inflows reached $17.07 billion in the first nine months of the current fiscal year. During the same period of FY23, it amounted to $16.03 billion.

Official data shows that typically, Bangladesh receives remittances ranging from $250 million to $300 million per month from the UAE. However, remittance income from the country began to increase from last November onwards.

From December to February, monthly remittances from the country averaged over $450 million. In March as well, remittances from the country exceeded $350 million, according to central bank data.

A similar trend was observed in remittance income from the United Kingdom. The country has advanced from fourth to second place on Bangladesh's list of top remittance source countries.

In the first nine months of FY24, remittances from the UK reached $2.14 billion, marking a 46% increase compared to $1.46 billion in the same period of the previous fiscal year.

Remittance inflows from Singapore have surged by around 48%. Additionally, remittances sent by Bangladeshi expatriates from Malaysia, Oman, Italy, Germany, and Bahrain have also experienced significant increases.

A veteran banker, who has been dealing with remittances for more than a decade, has attributed the increase in remittances from the UAE to the possibility of repatriation of laundered money.

Speaking to TBS on condition of anonymity, he said there is no apparent reason for the sudden surge in remittances from the Gulf country. Notably, there has not been a significant influx of new workers there in recent years, with only around 2.29 lakh workers having gone there in the last three years.

He said if there was growth in remittances from worker's income, then remittances from Saudi Arabia should grow the most. Because the number of workers in the country is about seven times that of the UAE. "On the contrary, remittances from Saudi Arabia are decreasing," he said.

Managing directors of two banks, speaking to TBS on condition of anonymity, said remittances from the United Kingdom could increase for various reasons.

Bangladesh has many remitters there who have been living for generations. Additionally, many Bangladeshis have gone there as students in recent years, they said.

Furthermore, they highlighted that several investments from Bangladesh have been directed to the UK, which could also have contributed to the increase in remittances.

Meanwhile, remittance income from the USA, which typically ranks first in remittances for Bangladesh, has decreased by around 31% in the July-March period of FY24 compared to the same period in the previous financial year.

According to central bank data, remittances from the country totaled only $1.94 billion in the first nine months of FY24, down from $2.80 billion during the same period last fiscal year. Consequently, the USA has fallen to the fourth position in the list of top remittance source countries for Bangladesh.

More than 65 lakh people migrated to different countries around the world for employment in the three years leading up to 2023. Out of this, a quarter, or 15.67 lakh workers, went to Saudi Arabia. Consequently, an increase in remittance income from Saudi Arabia was anticipated.

However, the remittance income from the country has been decreasing for the past two years. As a result, the country slipped to second place in terms of being a remittance source for Bangladesh last year, losing its top position to the USA.

In the current fiscal year, the country's position has dropped another notch. Remittances from the country in the first nine months of the fiscal year stood at $1.97 billion, compared to $2.76 billion at the end of the same period last fiscal year. This indicates that remittance inflows from the country fell by around 29%.

Remittances from Kuwait, Australia, South Korea, Qatar, and Japan also decreased significantly.

Syed Mahbubur Rahman, managing director and chief executive officer of Mutual Trust Bank, told TBS that the cost of living for expatriates has increased significantly in many countries, leading to a decrease in the amount of savings from their income.

He added, "Furthermore, some countries have imposed restrictions on outward remittances. These are considered to be the major reasons behind the decline in remittances."