Abstract

Author:
Asmita Chalise

Doi: 10.26480/jtwe.01.2024.31.35

This is an open access article distributed under the Creative Commons Attribution License CC BY 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited

Remittance refers to the private income transferred by migrant individuals back to their home country either periodically or regularly. Remittance is an essential source of foreign income for developing countries like Nepal. Poverty, lack of employment, lower wage rate, political instability are major push factors for labour migration. The remittance to GDP ratio of Nepal is highest among the countries of South Asia. In the fiscal year 2023, there was a rise in remittance inflows, which can be attributed to the significant numbers of individuals migrating outside the country. Remittances have partially alleviated poverty, redcued income inquality and enhanced the living conditions of people living in rural areas. While remittance brings some economic advantages to the country, it is equally important to acknowledge the potential long-term negative effects. The increased remittance inflow hasn’t contributed much to expand export however has contributed to increased import through excessive consumption. The export sector faces decline from 20031 million in FY2021/2022 to 157140.7 in FY2022/2023. The economy of Nepal is facing appreciation of real exchange rate due to large remittance inflow and use of remittance income on non-productive sector. There is need to devise policies that promote long term growth.