Contribution of Remittances to GDP: Case of Nepal

Abstract

The article explores how remittances significantly impact Nepal's economy, contributing nearly a quarter of its GDP. These funds, sent by migrants, support essential needs like food, education, and healthcare, thereby improving living standards and alleviating poverty. Remittances boost household purchasing power and stimulate demand for goods and services, driving economic growth. However, the study also highlights risks such as dependency on these inflows and their limited role in productive investments. It suggests that while remittances are crucial for Nepal's economic stability, a diversified strategy is essential for sustainable development, reducing reliance on remittances and fostering broader economic resilience.