Remittance-Induced Output Growth In Bangladesh: An Empirical Study

Remittance has become an indispensable and growing source of foreign funds for developing economies. The official remittance earnings alone constitutes more than double of the foreign direct investment and foreign aid together in Bangladesh in most of the fiscal years. The paper aims to estimate the probable impact of remittance inflow on growth of Bangladesh economy employing inferential statistics and finds that it produces a substantial impact on the growth of Bangladesh economy while it considers only the remittances that injects through formal sources. But there are strong evidences that inclusion of remittance from informal sources might raise it by 70 percent and ultimately could exert a greater impact on the development of the economy as a whole. The findings of the study have important implication in policy making, especially in detecting and solving the major obstacles of remittance transfer process through the formal channels to exploit the supreme benefits for the economy.