Contribution of remittance to GDP reaches 25 pct in Nepal

Source:Xinhua Published: 2014-6-19 20:25:52

Remittance inflow in Nepal has increased by 29.7 percent to reach 4.44 billion US dollars during the tenth month of the current fiscal year, a fresh report from the country's central bank said Thursday.

According to the report prepared by the Nepal Rastra Bank, the total inflow of remittance during the period equals to 25 percent of the poor Himalayan country's gross domestic product (GDP).

A recent study by the World Bank has ranked Nepal in third position in the world in terms of the contribution of remittances to the GDP.

The country recorded 4.34 billion dollars in remittance in the whole fiscal year 2012-13.

"The amount the country received as remittance during the tenth month in this fiscal year has surpassed the amount it received during the whole fiscal year in 2012-13," the report unveiled on Thursday said.

Remittance has been Nepal's one of the largest foreign currency income source.

With the lack of opportunities and shrinking industrial, service and agriculture sectors, majority of Nepali youths have been leaving to foreign countries in pursuit of employment.

Concerned government authorities in Nepal say some 1,500 Nepali individuals at an average leave for foreign destinations like Arab and Middle East every day.

"Remittance inflow has been growing due to the huge devaluation of the Indian currency against the US dollar from the beginning of 2014," the report added. "As a result, Nepali currency, which is pegged with Indian currency, also devalued, increasing the remittance figures in Nepali terms."

The data also estimates that the remittance income will reach around 5.50 billion dollars till the end of the current fiscal year.

"Due to the growing inflow of remittance and other factors, the overall balance of payment (BOP) in Nepal recorded a surplus of 1. 16 billion US dollars during the 10 months of 2013-14 compared to a surplus of Rs. 386 million US dollars during the same period of the last fiscal year," the report said.

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