Impact of Remittance on Economic Growth in Bangladesh

In Bangladesh, remittance is one of the most important economic variables in recent times as it impacts economic growth, helps balance payments, increases foreign exchange reserves, enhances national savings, and increases the velocity of money. Remittance has contributed around 35% of export earnings for about two decades. Moreover, it is more significant than foreign aid and thus helps in lessening dependence on foreign aid remittance gets momentum in recent times in Bangladesh and is the second largest sector of foreign currency earnings after the garment; sector. If the cost of imported raw materials is deducted from the foreign currency earnings of the garments sector, than it becomes the largest sector of foreign currency earnings. Remittance earnings is increasing daily but at a lower rate than the increase in emigration from Bangladesh due to the increasing share of unskilled or semi-skilled laborers than the professionals in international migration. The percentage of remittance in GNI (Gross National Income) is increasing daily. Remittance affects almost all the macroeconomic indicators of a country positively. Though there are also opposing sides to remittance earnings, e.g., brain drain, its overall contribution to Bangladesh's economy is very effective.