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Bangladesh has rejoined the South Asian remittance growth race with a strong surge in inflows, as expatriates sent more money home following the political changeover in August last year.

Although remittance growth in Bangladesh was robust in 2024, both Pakistan and Nepal posted sharper gains, according to the Asian Development Bank (ADB).

South Asia’s trend

In its latest report, Key Indicators for Asia and the Pacific 2025, the ADB noted that remittance inflows rose sharply across the region after the pandemic slump. Nepal led with a 36% rise to $14 billion, while Pakistan’s earnings grew 31% to $35 billion.

Bangladesh, meanwhile, received a record $27 billion in 2024, up 23% year-on-year. In the first seven months of 2025, inflows climbed another 26% to $19 billion, Bangladesh Bank data shows.

Why Bangladesh’s remittances jumped

Economist Zahid Hussain, former lead economist of the World Bank’s Dhaka office, attributed the surge mainly to the collapse of informal money transfers.

“A diversion of remittance income from hundi to formal channels happened after the July uprising, as money launderers were thrown out of power,” he said. “This is the biggest reason for the spike in remittance.”

Other drivers include the record number of workers going abroad — 1.196 million in FY2023-24, up from 1.137 million the year before — and higher exchange rates that made official transfers more attractive.

Reserves recover

The continuous rise in remittances has helped foreign exchange reserves bounce back after last year’s sharp decline. As of August 28, reserves stood at $26.19 billion (BPM-6), up 23% year-on-year, according to the central bank.

Regional comparison

India has enjoyed uninterrupted remittance growth since the pandemic, largely due to efficiency gains from its stronger technical education system, Hussain noted.

Sri Lanka, by contrast, saw remittances nearly halve in 2022 amid political turmoil before rebounding with a 58% rise in 2023 and another 9% in 2024.

Measured against GDP, Nepal leads South Asia with remittances at 33%, followed by Pakistan at 9.4%, Bangladesh at 6%, and India at 3.5%.

Bangladesh’s remittance share of GDP had fallen from 9.4% in 2010 to 4.7% in 2022, but climbed back to 6% in 2024.

The policy factor

Bangladesh Bank credited the rebound to policy moves such as narrowing the gap between official and informal market rates, more competitive offers from banks, and the sharp fall in hundi networks.

What needs to be done

Hussain urged the government to ensure money laundering does not return, and to cut migration costs. He also called for an end to illegal “visa trading”, which he described as a form of labour exploitation.

“If a worker has to pay $2,500 for a visa, it represents a huge loss for the labour export sector and foreign exchange earnings,” he said, suggesting government-to-government agreements as a solution.

Making migration cheaper and providing easier access to finance for low-income workers, he added, would encourage more to seek jobs abroad and keep remittance inflows growing.