Contribution of Worker’s Remittance in Nepalese Economy

Abstract

The research was to analyzed the trend of the worker’s remittance income and its contribution on macroeconomic variables of Nepal. Secondary data were used for the study collected from the Quarterly Economic Bulletin of Nepal Rastra Bank and Economic Survey of the Ministry of Finance for 33 years from 1984/85 – 2016/17 . Data were analyzed by using appropriate statistical tools and the analytical research design was used.

The simple regression models were used to test significance of worker’s remittance and its macroeconomic variables GDP, Consumption, Investment, Saving and FOREX. The finding from this study indicates that there was positive relationship between worker’s remittance and macroeconomic variables. The research also proved that worker’s remittance has a significant impact on the growth of GDP, Consumption, Investment, Saving and FOREX of the country. The research also found that the worker’s remittance income of Nepal has been increasing rapidly during two decades especially from 2000/01. The increasing trend of worker’s remittance affects the balance of payment (BOP) of country. The study recommend that Nepal needs to further formulate policies that a) send more worker’s remittances through official rather than unofficial channel. b) Increase the levels of worker’s remittance by encouraging migrants to hold their saving in financial assets in the country rather than holding them abroad and c) encourage migrants to become investor in productive assets in the country.

Keywords:Worker‟s Remittance , GDP, Consumption, Saving, Investment and FOREX