return icon

Overseas remittances to Vietnam forecasted to drop by 17% this year


Overseas remittances to Vietnam this year have been forecasted to fall by 17% this year due to the Covid-19 pandemic, according to a local economist.



Overseas remittances to HCM City in the first four months of the year reduce due to the impact of COVID-19. — Photo from the internet


Chief Economist Can Van Luc from the Bank for Investment and Development of Vietnam (BIDV) said that Vietnam’s overseas remittances in 2020 would be 10-15% or even 15-17% lower than that of last year if the Covid-19 pandemic continues.   

In 2019, Vietnam received total remittances of nearly USD17 billion, placing the nation among the world’s 10 biggest remittance beneficiaries, the World Bank reported.

Luc added that Vietnam’s key labour export markets such as the US, France, South Korea, Japan and Taiwan have been hard hit by Covid-19. “However, Asian countries like South Korea, Taiwan and Japan are expected to control the disease better than many European countries and the US; so the overseas remittances from these markets would fall just slightly,” Luc said.

Vietnam has basically controlled the pandemic and highly appreciated by the international community for this. This year, the country’s GDP growth has been forecasted to reach 4.5-5%, which is a positive sign for Vietnam to continue attracting overseas remittances.

Nguyen Hoang Minh, deputy director of the State Bank of Vietnam’s branch in HCM City, said that in the first four months of this year, overseas remittances sent through the city’s credit organisations were estimated at USD1.8%, down 2% on-year. Meanwhile, the city accounted for around USD5.3 billion out of the country’s total remittances of USD17 billion last year.

Overseas remittances through the Saigon Thuong Tin Commercial Joint Stock Bank in April declined by 20% against March, according to a representative.

A recent report by the World Bank indicated that this year the global overseas remittances would decrease 20% on-year amid the global economic slowdown caused by the Covid-19.

Job losses and lost hours and wages are expected to leave migrants in wealthier nations unable to send as much money home to poorer countries already suffering from coronavirus shutdowns, the report said.

Pandemic causes remittances to HCM City to fall by 2%

Overseas remittances to HCM City in the first four months of the year are estimated to be US$1.8 billion, a year-on-year decrease of 2 per cent, according to the State Bank of Vietnam.

This is the first decline in many years, it said.

Nguyen Hoang Minh, deputy director of the central bank’s HCM City office, said remittances to the city this year are forecast to be lower than last year due to the COVID-19 pandemic.

Some money transfer companies said remittances from abroad declined in the last two months, with some reporting declines of 50 per cent.

According to DongA Money Transfer Co., Ltd, inbound remittances in the first 22 days of April were down by half month-on-month.

Remittances from Europe were down the most, followed by the US, Canada, Australia and Viet Nam’s key labour markets such as South Korea, Taiwan, and Japan.

Key countries for remittances to Viet Nam such as the US, UK and Canada have been hit hard by the pandemic, and ethnic Vietnamese there, like many others, have lost jobs, leading to reduced remittances to their families.

The companies forecast remittances to further fall in the second quarter and said last year’s figure could not be reached if the pandemic prolongs.

Can Van Luc, chief economist at State-owned bank BIDV, said inflows this year could decrease by 10-15 per cent, and even 15-17 per cent in the worst case.

According to the World Bank, global remittances will decline by 20 per cent this year due to the economic crisis caused by the pandemic.

Remittances to low- and middle-income countries are projected to fall by 19.7 per cent to $445 billion.

Viet Nam ranks among the top 10 countries in the world in terms of remittances. They were worth $16.7 billion last year, with HCM City accounting for $5.3 billion

The majority of the money is converted into dong and deposited in banks or invested in business.

Dr Huynh Trung Minh, a financial expert, said, "The decrease in remittances will affect the supply of foreign currencies but not have a big impact on the exchange rate since supply and demand of foreign currencies remain steady.

“Viet Nam's foreign exchange reserves, ... of around $84 billion, are sufficient to stabilise the foreign exchange market in case of fluctuations."

In 2021 the World Bank expects remittances to LMICs to recover and rise by 5.6 per cent to $470 billion. 


Remittances to Vietnam through banks grow by 12 percent in 2019

Remittances to Vietnam through banks grow by 12 percent in 2019

Remittances into Vietnam in 2019 exceed US$2.5 billion, up by 12 per cent compared with the previous year.

High level of overseas remittances shows confidence in Vietnam’s economy

High level of overseas remittances shows confidence in Vietnam’s economy

The amount of overseas remittances, or ‘kieu hoi’ as called by Vietnamese, continues to increase, which shows that people see great business opportunities in the country.


Police search homes of four flight attendants in drug case

The HCMC police have found no illicit drugs at the residences of the four Vietnam Airlines flight attendants who were caught red-handed carrying illicit drugs to the country last week.

EVN asked to buy renewable energy at 90% import price

Investors involved in renewable energy project have proposed Vietnam Electricity Group (EVN) purchase power from eligible projects at an interim price equivalent to 90% of the electricity import price.

Minister hopes US becomes biggest investor in Vietnam

Minister of Planning and Investment Nguyen Chi Dung has voiced his hope that US enterprises will become the biggest investor in Vietnam.

Airbus Group pledges to expand supply chains in Vietnam

Airbus Group has committed to expanding its supply chain in the nation for new orders related to the production of aircraft spare parts, said Hoang Chi Mai, general director for Airbus in Vietnam, on March 21 at the Vietnam Aviation Forum.

Hanoi parents worried about students' high school entrance exams

Hanoi has announced its plans to enroll 72,000 students for public schools, which means that only 55.7 percent of secondary school graduates will obtain ‘tickets’ to enter public high schools.

Vietnam amends CIT law, fills in tax loopholes for multinationals

The Ministry of Finance (MOF) is collecting opinions on the draft for the Law on Corporate Income Tax (CIT), with an emphasis on tax incentives for multinationals.

Travel firms begin to sell tours to China in April

Travel firms and agents have begun selling tours to China with departure time in April, including both road and air tours. More orders will come if the first tours go smoothly.

Careful action required to curb inflation threat

Monetary experts are still mulling over whether Vietnam should soften or tighten policies to best suit current development circumstances.


Industrial, logistics property attractive to investors: Savills

Big U.S. businesses to explore opportunities in Vietnam

Major U.S. companies will come to Vietnam to sound out investment and trade opportunities in the Southeast Asian nation beginning today, March 21 to March 23, the local media reported.

Traders' frauds cause losses to Dalat's strawberry farmers

Farmers in the Central Highlands city of Dalat are complaining about losses as local traders are selling Chinese strawberries under the Dalat brand name.

Vietnam sets up working group to fight smuggling by air

The Ministry of Finance has just signed a decision to establish a working group to fight against smuggling by air.


Hanoi Tourism Festival 2023 takes place this week

Agricultural authorities draft plan to grow one million hectares of low-carbon rice

Twelve out of 13 provinces in the region have signed up for the plan. They have committed to reaching 200,000 ha next year, 719,000 ha in 2025, and over one million ha in 2030.

Top check-in places in Hai Phong

About 120 km from Hanoi’s center, Hai Phong is a famous port city and tourist destination in the North. The city’s symbol is a phoenix flower so it is known as the "red phoenix flower city".