COVID-19: Nepal may see remittance contraction of 28.7% in 2020, says ADB

Nepal maysee 28.7 percent contraction in remittance in 2020, highest in the developing Asiaamid a COVID-19 pandemic that has devastated economies, according to a report by the Asian Development Bank (ADB).

On thebasis of the baseline data of 2018, this translates to an estimated loss of $2.32 billion asNepali migrant workers sent home $8.29 billion in that year, according to the World Bank data.

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The report, called ‘Covid-19 Impact on International Migration, Remittances, and Recipient Households in Developing Asia’ was released this week stated ''the coronaviruspandemic is expected to hit remittances hard in Asia and the Pacific".

The countries facing "more severe" effects are those where the share of remittances to the gross domestic product and per capita remittances are high, such as Tonga, Samoa and other Pacific nations, it said.Nepal’s share of remittance to the country’s GDP stands at 27 percent.

According toGunakar Bhatta, spokesperson for Nepal’s central bank, Nepal Rastra Bank“Obviously, the situation is uncertain. The remittance income will not see a contraction by one-fourth as reported.”

The Manila-based lender said“Without continuous remittance flows, remittance-dependent households can fall into poverty or have difficulty meeting basic essential needs, as well as access to education and health services. Loan repayment is another challenge for remittance recipient households''.

"The worst-case scenario assumes that the domestic outbreak control and resumption of economic activities take a year's time," it said. "Uncertainty looms about the timing of full recovery, even as lockdowns are lifted."

Developing Asia, a group of 45 countries in the Asia-Pacific region, is forecast to clock up its weakest growth in nearly six decades this year, the lender said in its Asian Development Outlook report issued in June.