Nepal’s overreliance on remittances doesn’t indicate a good state of economy since the money sent by migrant workers is indicative of survival, not growth.
Nepal is witnessing one of the most intense protests in its history, with youngsters forcing the government’s exit over a ban on social media applications in the country. Along with other major issues that sparked the latest protests, Kathmandu’s weak economic indicators have played a significant role in facilitating the ouster of Prime Minister KP Sharma Oli’s government in the Himalayan nation.
Importantly, Nepal’s economy is significantly dependent on remittance inflows, as they form almost 33 per cent of the country’s Gross Domestic Product.
Remittances reaching Nepal grew by 36 per cent
Last year, the remittances reaching Nepal grew by 36 per cent to USD 14 billion. In other South Asian countries, such as Pakistan, remittances grew by 31 per cent to around USD 35 billion. Bangladesh also witnessed an increase of 23 per cent, reaching USD 27 billion. Notably, Indian migrant workers sent an amount of USD 137.67 billion in the year 2024, which is way ahead of its neighbours.
Nepal’s overreliance on remittances doesn’t indicate a good state of economy since the money sent by migrant workers is indicative of survival, not growth. In FY 2024/25, the Department of Foreign Employment issued 839,266 labour permits—a huge number for a nation of about 30 million people.
Substantial number of Nepali citizens going abroad
It is a noteworthy fact that a substantial number of Nepali citizens going abroad to earn a living is indicative of the fact that the country exports its youth to low-wage contracts while importing basics.
A total of 839,266 labour permits were issued in FY 2024/25, a significant rise from the previous year, serving as an important metric to describe the state of Nepal’s economy. With remittances, to a tune of almost 33 per cent of a nation’s GDP, keeping households afloat, the lack of structural transformation in the Himalayan nation has never been so significantly evident. This is the fourth highest in the world after Tonga, Tajikistan and Lebanon.
When all these plights went ignored, with the government even throttling youths’ voices, the country was up for turmoil, resulting in the removal of the government.
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