Remittances to Viet Nam to grow despite pandemic
The World Bank and the Global Knowledge Partnership on Migration and Development (KNOMAD) forecast that remittances to Viet Nam are estimated at US$18.1 billion in 2021.
As such, the country will be the eighth largest remittance recipient in the world and the third largest in the Asia-Pacific region this year.
This will the fifth consecutive year that Viet Nam remains in the top ten in terms of remittances, with $13.8 billion in 2017, $15.9 billion in 2018 and $17.2 billion in 2019.
According to Nguyen Hoang Minh, deputy director of the State Bank of Vietnam (SBV) in HCM City, remittances to HCM City – the country’s largest remittance recipient – were estimated to reach US$6.2 billion in the first eleven months of this year, against $6.1 billion for the whole of 2020. This year the city is expected to get around $6.5-6.6 billion worth of remittances, mainly from the US, Australia, Canada and the EU.
Minh attributed the rise to HCM City implementing social distancing to prevent the COVID-19 pandemic, so overseas Vietnamese transferred more greenbacks to support their relatives in the city.
Though there aren't complete statistics on the remittance’s destination, the amount of remittance poured into social security support was higher than previous years. The remaining remittance source was invested in production and business.
Minh noted the strong remittance inflow into Viet Nam amid the pandemic has had positive impacts on the foreign exchange market.
A stable US dollar and Vietnamese dong exchange rate would continue to facilitate the Government’s policies favoring businesses and people affected by the pandemic, he said.
Around two million people hailing from HCM City live abroad, and last year they sent home US$6.1 billion, up 15 per cent from 2019, before the pandemic struck.
Banks have been making investments to improve remittance services and launching promotional programmes to attract more of them.
Viet Nam received US$17.2 billion worth of remittances last year, the third highest in the East Asia and Pacific.
The remittances to the country have grown at an average of 6 per cent annually.
According to estimates from the World Bank’s Migration and Development Brief released recently, remittances to low- and middle-income countries are projected to have grown a strong 7.3 per cent to reach $589 billion in 2021. This return to growth is more robust than earlier estimates and follows the resilience of flows in 2020 when remittances declined by only 1.7 per cent despite a severe global recession due to COVID-19.