Busy period: A vendor walks past a shop selling decorations in downtown Hanoi. With the Christmas and Lunar New Year holidays close together this year, the volume of remittances is expected to be high during this period. — AFP
HANOI: International organisations are forecasting that the total amount of remittances to Vietnam may increase by 4.4% in 2022 and 3.6% to 4.5% next year.
According to a report on migration and development produced by the World Bank 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 on the global economy and high inflation in 2022, remittances to low and middle-income countries in 2022 would only reach US$626bil (RM2.77 trillion), an increase of about 5% compared to 2021 and much lower than the increase of 10.2% in 2021.
According to the World Bank and Knomad, Vietnam will rank eighth in the world and third in the Asia-Pacific region in terms of remittances in 2021.
The State Bank of Vietnam’s (SBV) branch in Ho Chi Minh City (HCM) said the amount of remittances flowing to the city in 2022 was forecast to reach about US$6.8bil (RM30bil), and added that although the growth rate of remittances to the city was lower than last year, it was still at a good level.
Banking experts said although there is a slight decline, growth is still expected in the peak season at the end of 2022. According to banks, remittances during the Tet (Lunar New Year) holiday typically increase by 20% to 25% when compared to the 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”. As a result, the volume of remittances is expected to be high.
Nguyen Duc Lenh, deputy director of the SBV’s HCM City branch, said that in general, remittances in the first nine months reached US$4.78bil (RM21bil), equalling 68% of the entire amount for 2021.
The amount of remittances transferred increased by 51% in the third quarter compared to the second quarter.
In Vietnam, Ho Chi Minh City has always been the leading locality in the country in terms of remittances received.
In 2021, the amount of remittances flowing to the city reached about US$6.5 to US$6.6bil (RM28.75bil to RM29.19bil), up 9% over the previous year, while for the whole country, the amount of remittances reached about US$12.5bil (RM55bil).
To prepare for the peak remittance season at the end of this year, banks and remittance companies invested in technology so that when relatives in foreign countries transfer money, it goes staright to personal accounts in Vietnam and be accessible in just a few minutes.
In addition, many banks have started promotions to attract remittances.
According to some commercial banks, they have put in place promotions and gifts for customers receiving deposits in order to increase the amount of remittances flowing to Vietnam on the occasion of the Lunar New Year.
Vietbank will launch the incentive “Hand-to-Hand Remittance – Receive Quality Gifts” programme for individual customers who receive overseas remittances 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 startup 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 housing law should be reformed so that overseas Vietnamese can buy more houses in Vietnam, creating favourable conditions for exchanges and attachments to their homeland.
In addition to simplifying investment certification procedures, relevant sectors will also need to study international experiences in encouraging remittances to form production funds, such as funds for real estate or to support startups. — Viet Nam News/ANN
