Sri Lanka's economy has been bolstered by robust worker remittance flows, with remittances reaching $7.6 billion since May 2022 [fcb47580]. In April 2024, worker remittances expanded by 19.7% year-on-year to $543.8 million. This brings the total remittances received by Sri Lanka in the first four months of 2024 to $2,079.9 million, representing an 11.4% increase compared to the same period last year [d5ba3e49].
The restoration of remittance and tourism flows has played a significant role in the country's economic recovery, which began in the latter part of 2022. However, remittance flows lost momentum in the second half of 2021 due to diversion through informal money changers and migrant workers choosing not to send money home. To encourage the use of formal banking channels, the government offered incentives, but false propaganda and criticism persisted. The Central Bank of Sri Lanka took measures to stabilize the economy, including floating the currency in March 2022 to mitigate the risk of inflation caused by devaluing the rupee while global commodity prices were rising [d5ba3e49].
The increase in worker remittances is a positive sign for Sri Lanka's economy, as it indicates the continued support of Sri Lankan migrant workers abroad. These remittances not only contribute to the country's foreign exchange reserves but also provide a vital source of income for many Sri Lankan families. The government's efforts to promote the use of formal banking channels for remittances have been instrumental in strengthening the economy and ensuring the stability of the financial system [d5ba3e49] [fcb47580].
Meanwhile, in Nepal, the economic situation shows a mix of trends. Remittance inflow increased by 20%, reaching Rs 1,198.6 billion in 2023/24. Nepali students' spending on education abroad surged to over Rs 104 billion. The decrease in Nepali workers going abroad suggests potential shifts in employment patterns or policies. Current account surplus, increased FDI, and BOP surplus growth indicate positive economic indicators. Merchandise exports declined, but exports to China surged while imports decreased. Foreign exchange reserves increased by 26.2%. The government executed cash transfers amounting to Rs 2.40 billion in one month. NEPSE gained 8.90 points, with transactions reaching nearly Rs 5.5 billion. The gold market remained stable. Foreign currency exchange rates showed mixed performance against the Nepali rupee [9c51d5db].
The positive economic indicators in Nepal, such as the increase in remittance inflow, current account surplus, and growth in foreign exchange reserves, reflect the resilience of the Nepali economy. The surge in Nepali students' spending on education abroad also indicates the growing aspirations and opportunities for Nepali youth. However, the decrease in Nepali workers going abroad suggests potential shifts in employment patterns or policies, which may have implications for the labor market and the overall economy. The government's execution of cash transfers and the stability of the stock market and gold market further contribute to the overall economic stability in Nepal [9c51d5db].