However, the country’s foreign exchange reserves crossed the $41 billion mark in October
The growth in remittance inflows, which remained upward even amid the Covid-19 pandemic, slowed down in October, reflecting the consequences of a fall in Bangladesh's labour exports amid a global economic crisis.
In October, the year-on-year remittance growth dropped to 28.62% from 45.64% in September, according to the Bangladesh Bank's data.
The total receipt of remittances was $2.11 billion in October, nearly 2% less than the total arrivals in the previous month.
Analysts said the government should take the necessary preparations, including making skilled human resources to cope with the globally changed labour market owing to the pandemic, in order to retain remittance inflows.
However, a robust inflow of remittances overall, even during the pandemic-hit months, contributed to helping the country's foreign exchange reserves cross the $41 billion mark in October.
Even though remittance growth has started slowing slightly, the World Bank is optimistic about an upward trend in the coming days for Bangladesh.
The World Bank, in its recent report titled "Migration and Development Brief," projected that Bangladesh would be among the top 10 remittance recipients globally this year.
At a time when the pandemic and economic crisis continue to destabilise the global economy, Bangladesh's remittance earnings may increase by about 8% in 2020 which may show a little sign of recovery, according to the report.
During the first four months of the current fiscal year (FY2020-21), the overall remittance inflows grew by 43.24% year-on-year.
Bangladesh received $8.8 billion during the July-October period, which was $6.16 billion during the same period of the last fiscal year.
The government continues to provide a 2% cash incentive on remittances through the legal channel. For this purpose, it has allocated Tk3,060 crore in the current fiscal year's budget.
The upward trend of the overall remittance earnings has posed a significant impact on the country's current account balance. In July to September, the current account balance of Bangladesh exceeded $3.5 billion.
Dr Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialogue, said the rise in the overall remittance inflows year-on-year will play a positive role in the rural economy by raising its purchasing power. It will contribute to creating demand in the national economy. Remittances also play a good role in maintaining reserves and exchange rates.
"However, to retain the growth, the government should take necessary preparations including new initiatives to export more labourers and stop their repatriation, undertake protective programmes for expats and create a skilled labour force as per the demand of the changed world," he added.
Finance Minister AHM Mustafa Kamal told The Business Standard that when remittances were coming in at an extraordinary and incredible pace in the first three months of the current fiscal year, many started saying it would not be sustainable. Different international organisations also spoke in the same tone.
He lamented this, saying, "It is very surprising that the expatriates are enriching the economy but we are not evaluating them and are trying to dispirit them."
The government requested the World Bank, at its annual meeting, recognise the hard work of Bangladesh's remittance fighters, the finance minister said.
The organisation is now saying the remittance inflow of Bangladesh will increase in 2020 and that the country will be eighth among the top 10 countries, globally, in terms of remittance earnings.