Migrant workers who toil abroad have once again beat forecasts, sending home 36 per cent higher remittance in August, in a respite for their families as well as the ailing economy amid the coronavirus pandemic.
Last month, they remitted $1.96 billion against $1.44 billion in the same month a year ago, Bangladesh Bank data showed.
This was the second straight month in the current fiscal year that they sent a higher amount of remittance. The inflow of remittance grew 50 per cent year-on-year to $4.56 billion in the July-August period.
This was the third month in a row that remittance inflows have been rising despite falling employment abroad and the return of migrant workers from their host countries, which are also struggling in the face of the pestilence.
About 181,000 migrant workers found jobs abroad from January to May. In contrast, at least 78,043 Bangladeshi workers returned home from 26 countries since April because of the crisis, according to statistics published by the expatriate welfare ministry last month.
Bankers credited the government's 2 per cent cash incentive on the remittance sent through the formal channels as one of the main reasons behind the recent surge.
"We had forecast that remittance inflow would increase because of the incentive," said Abu Reza Md Yeahia, deputy managing director of Islami Bank Bangladesh Ltd, the top remittance-receiving bank.
Besides, the expansion of agent banking in suburban areas has encouraged migrant workers to send money through the formal channel as the beneficiaries receive the funds very quickly, he said.
Yeahia also found repeated floods behind the spiral in inflows. There was a restriction on sending money above a certain amount in the Middle East, particularly in Saudi Arabia. That restriction has been relaxed, he said.
Gulf countries, which include Saudi Arabia, the UAE and Kuwait, are home to 75 per cent of about 1.3 crore Bangladeshis living abroad for jobs.
Remittance hit an all-time high of $18.2 billion in the fiscal year 2019-20, up 10.87 per cent year-on-year.
The growing inflows of remittance boosted the country's foreign exchange reserve and it came amid gloomy forecasts by the World Bank and the Asian Development Bank.
The ADB said Bangladesh would be among the five worst developing Asian economies in terms of remittance inflows. In the worst-case scenario, Bangladesh's remittance will decline by 27.8 per cent from its 2018 level.
In 2018, Bangladesh received $15.5 billion in remittance.
In April, the World Bank forecast that remittance flow to Bangladesh may plunge by as much as 22 per cent this year because of the ongoing pandemic.
The rising flow of remittance took the country's foreign currency reserves to an all-time high of $38.48 billion on August 26, BB data showed.
Transfers from migrant workers have progressively become a pillar of strength for the Bangladesh economy.
Some 590,000 migrant workers left Bangladesh on an average every year from 2007 to 2017 and 8 per cent of the households have at least one international migrant. Remittances account for 60 per cent of income in households with international migrants.
Forty-one per cent of households with at least one family member engaged as a migrant worker would be in poverty without remittance, said Stefano Paternostro, practice manager for social protection and jobs for South Asia at the WB last September.