Foreign Remittances and GDP Growth in Bangladesh: A Time-Series Perspective

This study investigates the impact of foreign remittances on economic growth in Bangladesh using annual time-series data from 1999 to 2023. Employing the Augmented Dickey-Fuller (ADF) test to assess stationarity and an Ordinary Least Squares (OLS) regression model on firstdifferenced variables, the analysis reveals that remittances have a statistically significant and positive effect on short-run GDP growth. Capital formation and consumption expenditure also positively influence economic growth, while inflation is found to have a negative impact. The results suggest that remittances can play a vital role in supporting Bangladesh’s macroeconomic development, particularly when effectively channelled into productive uses. The study highlights the need for sound macroeconomic policies to complement remittance inflows and encourages further efforts to enhance financial inclusion and formal remittance channels. These findings provide valuable insights for policymakers aiming to leverage remittance inflows for sustainable economic growth.