Remittances to Vietnam forecast to increase by 4.4% in 2022

Illustrative photo (Source: VNA)

International organisations have forecast that the total amount of remittances to Vietnam may increase by 4.4% in 2022 and 3.6-4.5% the following year.

According to a Report on Migration and Development produced by the World Bank (WB) and the Organisation for International Cooperation on Migrants (KNOMAD), despite the COVID-19 pandemic and inflation growth in many countries, the flow of remittances to Vietnam is still quite stable compared to previous years.

The World Bank's report said due to the impact of the global economy and high inflation in 2022, remittances to low- and middle-income countries in 2022 would only reach 626 billion USD, an increase about 5% compared to 2021, much lower than the increase of 10.2% in 2021.

The World Bank and KNOMAD said that Vietnam ranked eighth in the world and third in the Asia-Pacific region in the amount of remittances in 2021.

The State Bank of Vietnam (SBV)’s Branch in Ho Chi Minh City, said that the amount of remittances flowing to the city in 2022 was forecast to reach about 6.8 billion USD, adding that although the growth rate of remittances to the city was lower than last year, it was still a good level.

Banking experts said although there is a slight decline, growth was still expected in the peak season at the end of 2022. Banks said that the amount of remittances during Tet (Lunar New Year) holiday usually increased by 20-25% compared to other months of the year.

According to insiders, as the Tet holiday in 2023 comes close to Christmas and New Year, overseas Vietnamese will focus on sending money back on New Year's Eve for their loved ones to celebrate Tet and have lucky money. Therefore, the amount of remittances is expected to be very positive.

Nguyen Duc Lenh, Deputy Director of the SBV’s HCM City Branch, said that in general, remittances in the first nine months reached 4.78 billion USD, equaling 68% of the entire amount for 2021. The amount of remittances transferred in the third quarter increased by 51% compared to the second quarter.

In Vietnam, HCM City has always been the leading locality in the country in terms of remittances received.

In 2021, the amount of remittances flowing to city will reach about 6.5-6.6 billion USD, up 9% over the previous year, while for the whole country, the amount of remittances reached about 12.5 billion USD.

To prepare for the peak remittance season at the end of this year, banks and remittance companies have been investing in technology so that when relatives in the foreign countries transfer money, it will go to personal accounts in Vietnam and be accessible in just a few minutes.

In addition, many banks have started implementing promotions to attract remittances. According to commercial banks, in order to have an increasing amount of remittances flow to Vietnam on the occasion of the Lunar New Year, commercial banks have implemented promotions and gifts for customers receiving deposits.

Vietbank will launch the incentive "Hand-to-hand remittance - Receive quality gifts" programme for inpidual customers who receive overseas remittance payments or introduce customers to receive remittance payments via Western Union and MoneyGram at Vietbank.

Similarly, Sacombank has implemented a free service for receiving remittances from abroad via Sacombank Visa card.

To facilitate the attraction of start-up investment capital in the domestic market of young overseas Vietnamese, Nguyen Tri Hieu, a finance and banking expert, said that the State needs to create breakthroughs in policies for overseas Vietnamese and overseas remittances. Accordingly, the Law on Housing should be reformed so that overseas Vietnamese can buy more houses in Vietnam, creating favourable conditions for exchanges and attachment to their homeland.

In addition to simplifying investment certification procedures, in the coming time, relevant sectors also need to study international experiences in encouraging remittances to form production funds, such as funds for real estate or to support start-ups.

According to experts, the increasing amount of remittances to Vietnam not only helps banks increase profits from service activities, but also attracts foreign currency sources for Vietnam, helping the banking industry increase foreign exchange reserves. Therefore, is necessary to open up mechanisms and policies for overseas Vietnamese to attract remittances./.