Record-Breaking Remittance Inflow in Nepal: Nearly NPR 200 Billion Received in Jestha Alone

Nepal has set a new record in remittance inflows, with Nepali migrant workers sending nearly NPR 200 billion in the month of May-June alone (Jestha). According to the latest monthly report published by Nepal Rastra Bank (NRB) on Tuesday, remittances totaling NPR 176.30 billion were received in May-June.

This surpasses the previous highest monthly remittance recorded in April (Baisakh) at NPR 165.30 billion, followed by NPR 151 billion in February (Fagun) and NPR 144 billion in October (Asoj).

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In the first eleven months of the current fiscal year (from mid-July to mid-June), Nepal received remittances worth NPR 1.532 trillion, a 15.5% increase compared to the same period last year. Last year, remittance inflow during this period stood at NPR 1.327 trillion, with a growth rate of 16.9%.

In terms of US dollars, remittance inflows rose by 12.7% in May-June, reaching USD 1.125 billion. During the same month last year, remittances in US dollars had grown by 15.2%.

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Why the Remittance Boom?

According to former president of Nepal Remitters Association, Chandra Tandon, increasing numbers of Nepalis in Europe, South Korea, Japan, and traditional destinations like Malaysia and Qatar have contributed to the rise. Additionally, the strengthening of the US dollar has also boosted remittance inflows.

“More Nepalis are heading to Europe, and remittance from South Korea and Japan has also increased compared to previous years, while inflows from Malaysia and Qatar remain steady,” Tandon said. He predicts remittance inflows will continue to rise due to improvements in the economies of destination countries and growing numbers of outbound Nepali workers.

Labor Migration Also Rising

The surge in remittances corresponds with the rising number of migrant workers. In the first eleven months of the fiscal year, 452,324 Nepalis received final labor approvals (both institutional and individual), while 308,067 obtained renewals for labor permits abroad. Both figures are higher than last year, when 421,356 received final approvals and 261,210 renewed their permits.

Remittance: A Decade of Growth

Historical data shows steady growth in remittance inflows over the past decade. Nepal received around NPR 625 billion in 2014/15, which grew to NPR 971 billion by 2020/21. In 2021/22, remittance inflow reached NPR 1.007 trillion, and it surged to NPR 1.445 trillion in 2023/24.

Despite limited improvements in exports, tourism, and foreign direct investment (FDI), the continuous rise in remittances has strengthened Nepal’s external sector. NRB’s latest report shows that foreign exchange reserves, balance of payments, and current account indicators are all improving.

Economists Caution Against Overreliance

However, economists warn that rising remittances should not overshadow deeper structural economic issues. They criticize the government for celebrating remittance growth without addressing sluggish economic activities, weak credit flow, stagnant government revenue, and poor capital expenditure.

“Strength in the external sector is mainly driven by favorable foreign economies, not by Nepal’s domestic policies,” they said.

Foreign Reserves at Record High

Nepal’s foreign exchange reserves have been consistently breaking records for the past 33 months. As of May-June (Jestha), reserves reached NPR 2.569 trillion, up 25.9% from the previous year.

In the current fiscal year’s eleven months, foreign exchange reserves increased by NPR 528.29 billion. By mid-July 2024, the reserves stood at NPR 2.041 trillion. In US dollar terms, reserves rose by 22.2%, reaching USD 18.65 billion from USD 15.27 billion during this period.

According to NRB, current foreign exchange reserves are sufficient to cover 17.6 months of goods imports and 14.7 months of goods and services imports, far exceeding its minimum target of seven months.

Signs of Recovery in Domestic Economy

Despite external strength, some signs of recovery have emerged domestically. NRB spokesperson Kiran Pandit said, “Economic indicators suggest gradual recovery, with good growth in deposits and some improvements in credit flow.”

By the end of May-June, the current account surplus reached NPR 307.31 billion, and the balance of payments recorded a surplus of NPR 491.44 billion—both showing improvements over last year’s figures of NPR 238 billion and NPR 425 billion, respectively.

However, the NRB report also points out that government revenue, capital expenditure, and foreign aid inflows remain below expectations, suggesting sluggish overall economic activity despite record remittances.

Other Key Economic Indicators

Foreign Direct Investment (FDI): NPR 11.09 billion in equity investment during eleven months, up from NPR 8.24 billion last year.
Inflation: Average consumer price inflation was 2.72% in May-June, down from 4.17% in the same month last year and lower than in April.
Deposit Growth: 12% increase
Credit Growth: 8.7% increase

Inflation by Category (May-June 2025):