Bangladesh one of three large remittance recipients

Bangladesh became one of the three large remittance-recipient countries that registered a rise in inward remittance last year_ according to a new report of the Economist Intelligence Unit.

Last year_ Bangladesh received about $19.8 billion in remittance compared to $18.4 billion it received the year before_ said the report.

The other two countries that saw rise in inward remittance last year are Mexico ($40.5 billion) and Pakistan ($24.1 billion). Their inward remittance in 2019 was $39 billion and $22.2 billion respectively_ added the report which also used World Bank data.

With the figure of $19.8 billion_ Bangladesh is the eighth highest recipient of remittance among the 10 countries listed by the recently published EIU report -- "Covid-19 and Migrant Remittances: A Hidden Crisis Looming?"

Other large remittance recipients in the list -- India_ China_ the Philippines_ Egypt_ Nigeria_ Vietnam_ and Ukraine -- saw decline in inward remittance last year.

Globally_ inward remittance declined by $50.5 billion last year with countries receiving $666.2 billion compared to $716.7 billion the year before_ the report said.

"The World Bank estimates that global remittances fell by 7 percent in 2020_ surpassing the 5 percent decline seen during the global financial crisis in 2009."

A further 7 percent drop in remittances is expected in 2021_ owing to the pandemic's lingering effects on the global economy_ the report added.

The EIU study mentioned that in Pakistan and Bangladesh_ increased remittance inflows were likely tied to factors unique to 2020. These included the repatriation of overseas savings by nationals returning home after losing their jobs; this trend was especially notable in the Gulf economies_ which suffered greatly amid the crash in oil prices and tourism.

The introduction of new remittance tax incentives by the authorities -- in 2020 by Pakistan and in 2019 by Bangladesh -- could also have boosted flows_ but those effects may well be temporary_ the report said.

The one-off nature of these factors increases the risk of remittances falling this year. This could be problematic for Pakistan and Bangladesh_ which both ran pre-Covid current-account deficits and rely on remittances for a sizeable share of current-account credits.

The report said a sharp depreciation of the peso at the onset of the pandemic encouraged the flow of remittances to Mexico from the US_ as the value of remittances in local currency was artificially increased.

The report said the pandemic has had an enormous impact on international flows of migrant remittances_ which represent a significant source of economic support for many poor countries.

"Apart from a few exceptional cases_ most remittance-receiving countries are in a very difficult position_" it said.

Many registered a steep fall in remittances in 2020 compared with 2019_ such as the Kyrgyz Republic_ which suffered a 22 percent drop_ the report added.