Impact of Remittance Inflow on Foreign Import in Nepal

Abstract

Nepal is the top country in Asia to receive remittance from foreign countries. Since the 1990s, there has been a tremendous increment in the remittance inflow in Nepal. It is not an exaggeration to say that by and large, the Nepalese economy has been supported by the remittance that it received from foreign countries. But unfortunately, this remittance has not played any significant role in the development of Nepal. The major portion of this remittance is spent on importing merchandise from foreign countries. It is therefore a pertinent question, is there any empirical relationship between remittance received and import of merchandise? The researcher has tried to find out this through econometric modeling. For this, time-series data of 26 years from 1993 to 2018 have been analyzed. From this analysis, it has been found that there is a significant impact of remittance on imports in Nepal.