In the world, Nepal is the top recipient of remittances.

Among the nations that receive remittances, Nepal holds the top spot globally. With remittances into Nepal being the largest in the world, the World Bank has played a major role in supporting family expenses in this country.

Nepal has the highest personal remittance GDP ratio in the world, according to the World Bank's report on "Nepal Development Update: International Migration and its Impact on Nepal," which was released on Wednesday. In Nepal, the amount of remittances received amounts to almost 25% of the GDP. Despite being the second-largest beneficiary of remittances in South Asia, it is over three times higher than Pakistan. where the share of GDP that comes from remittances is 7.8%.

The study indicates that foreign exchange has grown to be a solid basis as a result of the rise in remittances to Nepal. Official remittance inflows have risen to a nine-year high in recent times. According to the report, poverty in Nepal has decreased as a result of remittances growing in size. Statistics show that personal remittances contributed to a greater than 30% decrease in poverty between 2011 and 2023.

World Bank National Director for the Maldives, Nepal, and Sri Lanka, David Sislen, commended the report's release and highlighted how much Nepal has benefited from remittances from overseas workers. "It is important for Nepal's future to improve the management of these flows, develop a thriving domestic economy that better supports Nepalis seeking employment abroad, and increase the productivity of skilled Nepalis within the country," he says.

Deputy Governor of Nepal Rashtra Bank Dr. Neelam Dhungana, in turn, stated during the panel discussion on "Making the Must of International Migration in Nepal" that short-, medium-, and long-term strategies have been developed to improve the usefulness of remittances sent by Nepalis who have relocated abroad. According to Dr. Dhungana, "the country has encouraged the introduction of remittances through the formal system." Remittance account customers who maintain fixed deposits earn an extra one percentage point in interest. Our goal in doing this is to guarantee that remittances end up in the productive sector.

It is anticipated that the rate of economic growth will reach 5.1%.

Nepal's economic growth is anticipated to improve. The economic growth rate of Nepal is expected to rise from 3.9 percent in the previous fiscal year (2023) to 5.1 percent in the current fiscal year (2024). A published report titled 'Nepal Development Update: International Migration and its Impact on Nepal' projects this kind of growth. The forecast is said to be realized since it is supported by rising tourism, hydropower, and rice production, according to the research.

The current economic progress has been examined in the World Bank's semi-annual Nepal progress Update, which makes it pertinent from a long-term and international standpoint. It is anticipated that Nepal's GDP would increase by 5.5 percent in the upcoming fiscal year (year 2025). It has been stated that because of the central bank's flexible monetary policy and the relaxation of regulatory requirements, the private sector will considerably contribute to Nepal's growth.

The impact that the nation may have on the economy as a result of the present floods and landslides that the country is experiencing is not included in the economic growth prediction.

Nonetheless, it is anticipated that the manufacturing, wholesale, and retail sectors, as well as the construction and construction industry, will profit from Nepal Rastra Bank's flexible monetary policy, leading to a rise in private sector investment. The World Bank predicts that a 30 percent rise in tourist arrivals in 2024 will boost the transportation, housing, and food industries in addition to the service sector.

"The economy will benefit from increased hydropower and agricultural sector production." According to the research, this year will see a 450 megawatt rise in hydropower production and a potential 4.3% increase in rice production. David Sislen, National Director of the World Bank for the Maldives, Nepal, and Sri Lanka, notes that Nepal's development depends on keeping up the rate of economic growth. He made the case for the necessity of ongoing development in important fields including infrastructure, governance, the development of human capital, and the private sector.

Anticipated inflation is to be five percent.

According to World Bank estimates, inflation will roughly match economic growth. Inflation is predicted by the research to be 5% in 2025 and 4.5 percent in 2026. In contrast, inflation is forecast to be 5.4% in 2024 and 7.7% in 2023.

In a similar vein, the research projects a 1.8% increase in private sector consumption for fiscal year 2081/82. Furthermore, it is predicted that this year would see a 5.8% growth in government sector consumption. In a similar vein, the World Bank has noted that although government revenue is anticipated to rise by 20%, the current account surplus will stay at 2.6% of GDP.

The financial system is highly risky. 

Numerous hazards have also been mentioned in the Nepal Development Update Report. Risks include non-performing loans, which restrict the growth of private sector credit and pose significant risks to the financial system; potential policy discontinuities, which could impact investment; delays in the implementation of capital expenditures, which could impact the development of infrastructure; regional instability; and trade disruptions, which could lower domestic demand and tourism.

In a same vein, the paper notes that "growth, especially international remittances that play a role in household consumption, poverty alleviation, and human capital development, may also slow down in Gulf countries receiving migrant workers and shocks in Malaysia." However, immigration to Nepal is still quite costly, and many people find the procedure difficult and opportunities uneven. The paper gives the latest information on the advantages and costs of migration in Nepal and highlights the major policy actions needed to develop an inclusive migration management system to ensure sustainability and increase returns.

However, according to Prof. Dr. Shivraj Adhikari, Vice President of the National Planning Commission, Nepal's economy is gradually improving. He asserts that strengthening the budgetary process and completing projects that are nearing completion should be our top priorities in order to boost capital spending and maintain macroeconomic stability. "It will increase the domestic product and create more jobs," he stated.