Remittance brings relief amid Middle East crisis

Even amid the ongoing Iran-Israel conflict, there is a sense of relief in remittance sent by Bangladesh's expatriates. Due to war in Iran and ME, sending new workers to six Gulf countries and the wider Middle East has not been possible as before.

However, this has not affected remittance inflows. For the past five months, remittance has consistently remained above three billion dollars. This information comes from the latest report of Bangladesh Bank.

Officials concerned said that due to tensions and instability in the Middle East, many workers could not return home on time. At the same time, some also faced difficulties in going abroad again. This has negatively affected labour migration to the Middle East. Despite all this, remittance inflows have shown stability. The trend may remain positive in the current month as well, driven by Eid-ul-Azha. Overall, in the current fiscal year, $29.33 billion in remittance has been received, which is about 20 percent higher than the same period last year. Without this steady flow of remittance, the national economy would have faced negative impacts.

According to Bangladesh Bank data, remittance stood at $3.13 billion in April. In March, driven by Eid-ul-Fitr, the country recorded a remittance inflow of $3.76 billion, breaking previous records. In February, it was $3.02 billion, while in January it stood at $3.17 billion. In December, expatriates sent $3.22 billion.

Former economics professor of Chittagong University Dr. Moinul Islam said that control over money laundering channels such as hundi, as well as under-invoicing and over-invoicing in business, has increased the flow of remittance through formal banking channels. Even though worker migration to the Middle East has slowed due to war, remittance has still increased.

According to central bank data, a total of $29.32 billion in remittance has come home during the July–April period of the current fiscal year. In the same period last fiscal year, it was $24.54 billion, an increase of $4.78 billion or 19.54 percent in a year.

Economist and researcher of Change Initiative Hela Ahmed Jony said that the rise in remittance despite ongoing Middle East tensions is a positive signal for the country. However, if the regional crisis worsens, Bangladesh’s economy could face negative impacts, like many other countries. Overall, due to expatriates’ continued support and effective policies in the global economic environment, a record level of remittance was achieved in March.

Bangladesh Bank data shows that foreign exchange reserves crossed the highest level of $48 billion in August 2021. After the fall of the Awami League government, reserves fell to $20.48 billion under Balance of Payments and International Investment Position Manual, Sixth Edition by IMF. And, $25.92 billion in gross terms. However, during the 18 months of the interim government, reserves increased by $10 billion. Currently, reserves have exceeded $35 billion.

The Refugee and Migratory Movements Research Unit (RMMRU) founder, professor Tasneem Siddiqui, said remittance inflows have increased due to strengthened banking channels and government policies. However, long-term measures are needed to ensure faster growth in remittance inflows. If existing gaps are addressed, the country could eventually receive $3.5 to $4 billion in remittance every month.

According to Bangladesh Bank, remittance was $2.89 billion in November. In October and September, inflows were $2.56 billion and $2.68 billion respectively. In August and July, they were $2.42 billion and $2.47 billion respectively. Overall, expatriates sent $30.32 billion in the 2024–25 fiscal year.