Remittances and Economic Growth: A Causality Analysis for Nepal
Udaya Bahadur Rana Magar1, Naba Raj Upadhyaya2

1Udaya Bahadur Ranamagar, Director, Department of Commerce and Supply under the Ministry of Commerce and Supply, Government of Nepal.

2Naba Raj Upadhyaya, International Relations Student at the Tribhuvan University of Nepal.

Manuscript received on 09 August 2022 | Revised Manuscript received on 01 September 2022 | Manuscript Accepted on 15 November 2022 | Manuscript published on 30 November 2022 | PP: 25-33 | Volume-2 Issue-2, November 2022 | Retrieval: 100.1/ijef.B2523112222 | DOI : 10.54105/ijef.B2523.112222 

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Abstract: This paper deals with remittance and the economic growth of Nepal. Remittance is a significant source of the Nepalese economy. It is one of the critical sectors, and it has directly related to the immigration of people. This study aims to identify the relationship between Nepal’s migration, remittance, and the economic growth. This paper is based on secondary sources of information. The Granger causality test examines the causality between remittance and economic growth of Nepal. The result of the Granger causality test shows that both the Nepalese people’s entry and exit from the country are significant for the economic growth of Nepal. The remittance received from migrated people is significant for the economic growth of Nepal. The contribution of remittance to GDP has increased, and the poverty level has decreased over the years. The education sector has improved, and the development level is gradually increasing. Therefore, there is an urgent need for policies with a high priority on national interests for managing international migration (both emigration and immigration) and remittance. This implies that the policy maker should implement an appropriate policy to invest in capital formation. It may be conducive to the economic growth of Nepal.

Keywords: Migration, Remittance, & GDP of Nepal
Scope of the Article: Corporate Finance