Understanding the shifts in remittance sources and their economic impact on Bangladesh.
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Overview of Remittance Inflows
In the first seven months of the 2024-25 fiscal year, Bangladesh witnessed significant remittance inflows, totaling approximately $15.96 billion from the top 30 countries. The primary contributors were the United States, the United Kingdom, and Saudi Arabia, which have historically been the leading sources of remittances for the country.
This financial support plays a crucial role in the Bangladeshi economy, providing essential funds for families and contributing to national development.
Leading Contributors to Remittances
The United States emerged as the top source of remittances, with inflows reaching $2.9 billion from July 2024 to January 2025.
Notably, December marked a peak in remittance inflows from the US, amounting to $565.04 million, before a decline to $407.52 million in January. The UK followed as the second-largest contributor, with total remittances of $1.47 billion during the same period. Migrant Bangladeshis in the UK sent home $248.48 million in December, which increased to $273.4 million in January.
Saudi Arabia, traditionally the largest remittance-sending country for Bangladesh, contributed $1.99 billion. However, January saw a significant drop of 30% in inflows from the kingdom, highlighting the volatility in remittance sources. The United Arab Emirates also played a vital role, with total remittances of $2.27 billion, although inflows decreased from $370.85 million in December to $249.56 million in January.
Shifts in Remittance Dynamics
Recent trends indicate a shift in remittance sources, with the UAE and the USA gaining prominence over Saudi Arabia. Professor Mustafizur Rahman from the Centre for Policy Dialogue noted that the rise of aggregators has influenced these changes. Aggregators purchase foreign currency from remitters at premium rates and sell it to banks, creating a new dynamic in the remittance market. Dubai has emerged as a key hub for these activities, leading to increased inflows from the UAE while causing a decline from Saudi Arabia.
Moreover, remittance inflows typically surge before major festivals and winter, as migrants send money home for celebrations such as Eid and Durga Puja. This seasonal pattern underscores the importance of remittances in supporting families and communities in Bangladesh.
Long-term Trends and Future Outlook
Over the years, remittance inflows to Bangladesh have shown dynamic shifts influenced by global economic trends, migration policies, and labor market conditions. From FY2016-17 to FY2024-25, the UAE’s remittances increased from $2.09 billion to $3.01 billion, while Saudi Arabia’s contributions rose from $2.26 billion to $3.75 billion. The US also experienced steady growth, reaching $2.96 billion in FY2022-23.
Emerging sources such as South Korea and Japan have also begun to play a more significant role in remittance inflows, reflecting changing migration patterns. However, some Middle Eastern countries, like Qatar and Oman, have experienced fluctuations in their contributions. The ongoing changes in the global remittance landscape necessitate close monitoring by relevant authorities to ensure that Bangladesh continues to benefit from these vital financial flows.
