Remittances soar for Lunar New Year 2024
Remittances soar for Lunar New Year 2024
The positive growth trend of remittances during festive seasons 2024 contributes to the stability of exchange rates, the foreign exchange market, and economic growth in Ho Chi Minh city.
According to the State Bank of Vietnam's branch in Ho Chi Minh City, in 2023, Ho Chi Minh City, the destination receiving the most remittances from overseas Vietnamese, recorded the highest increase in the past 10 years, reaching $9.46 billion, a 43.3 per cent increase compared to 2022.
This amount is 2.7 times the total foreign direct investment (FDI) into Ho Chi Minh City and accounted for about 14 per cent of the city's gross regional domestic product in 2023.
Over the last five years, remittance inflows to Ho Chi Minh City have consistently shown an upward trend, with proportions significantly higher than the national average. Specifically, from 2018 to 2022, remittances to Ho Chi Minh City accounted for 44.1 per cent, 48 per cent, 53.8 per cent, 52.8 per cent, and 55.03 per cent of the national total amount received, respectively.
In addition to the fact that many expatriates have their roots and families in Ho Chi Minh City, the investment environment in the city as a dynamic financial hub along with the convenience and efficiency of the remittance payment system, have become a primary driving force attracting remittances to every year.
Nguyen Duc Lenh, deputy director of the State Bank of Vietnam's branch in Ho Chi Minh City said, “The remittances in 2023 are closely tied to the growing trend of labour migration and employment abroad. As countries ease border restrictions and health regulations following the economic impact of the pandemic, the number of Vietnamese workers going abroad has increased, resulting in higher remittances from this group.”
The recent amendment to the Law on Real Estate Business, allowing Vietnamese expatriates holding dual citizenship to invest in and do business in real estate like domestic citizens, is a positive condition for a significant surge in remittances to the country at this time.
Remittance transactions are not only a way for overseas individuals to express love and support for their families, but also a crucial source that contributes to maintaining the foreign exchange supply-demand relationship and supporting effective monetary, exchange rate, and foreign exchange market policies.
Dinh Trong Thinh, a financial expert, said “Remittances constitute a substantial source supplementing the investment capital of the private economic sector in the country. Although the investment capital from remittances may not be large, it is an essential resource that Vietnam receives annually. Alongside FDI, remittances play a crucial role in increasing foreign exchange reserves, meeting domestic demand and sustaining stable exchange rate policies.
The increasing volume of remittances to Vietnam not only helps banks increase profits from service activities but also serves the policy of attracting foreign exchange for Vietnam, aiding the banking sector in increasing foreign exchange reserves.
The State Committee for Overseas Vietnamese Affairs stated that over the past 30 years, Vietnam has attracted over $190 billion in remittance, nearly equal to the disbursed FDI during the same period. In 2022, remittances reached $19 billion, placing Vietnam in the top 10 countries globally in terms of remittance recipients.
