Remittances, Growth, and Stability: An Empirical Analysis of Bangladesh's Economy

Remittance inflows have become one of the most significant drivers of economic growth in Bangladesh, serving as a vital source of foreign exchange earnings, poverty reduction, and household welfare improvement. This study examines the contribution of remittances to Bangladesh’s economic growth by analyzing their direct and indirect impacts on macroeconomic stability, investment, and consumption. Using time-series data from national and international sources, the study explores the dynamic relationship between remittance inflows and GDP growth through econometric techniques. Findings suggest that remittances positively influence economic growth by enhancing household income, stimulating demand, and facilitating investment in education, healthcare, and small businesses. Additionally, remittances act as a cushion against external shocks, contributing to financial stability and reducing dependency on external borrowing. However, the study also highlights challenges such as the potential for inflationary pressure, reduced labor force participation in domestic markets, and the need for productive channeling of remitted funds. The results underscore the importance of effective policy frameworks to maximize the developmental benefits of remittances. Strengthening financial institutions, promoting skill-based migration, and encouraging investment-oriented use of remittances are essential strategies for sustaining economic growth in Bangladesh.