Strong growth momentum from remittances

Over the past year, despite facing many difficulties due to the impact of the global economic recession and political instability in many places, overseas Vietnamese have still made efforts to adapt, stabilize their lives and continue to contribute to their homeland.

Customers transact at Agribank branch.

According to the State Committee for Overseas Vietnamese, there are currently nearly 6 million Vietnamese living, studying and working in 130 countries and territories. Despite the global economic difficulties, remittances to Vietnam still maintain its position in the top 10 countries with the largest remittances in the world. As of November 2023, there were 421 projects of overseas Vietnamese in 29 countries and territories investing in Vietnam with a total registered capital of more than 1.72 billion USD.

Remittances increased by 32%

The latest data from the State Bank of Vietnam shows that in 2023, the amount of remittances is estimated to reach 16 billion USD, an increase of 32% compared to 2022. Of which, the amount of remittances transferred to Ho Chi Minh City reached nearly 9.5 billion USD, an increase of 43.3% compared to 2022. This is the highest growth rate in the past 10 years. At the same time, the State Bank of Vietnam, Ho Chi Minh City Branch, also forecasted that the amount of remittances in 2024 transferred through commercial banks and economic organizations in the area will increase by about 20% compared to 2023.

The World Bank (WB) also forecasts that remittances to Vietnam will continue to increase, reaching 14.4 billion USD by the end of 2024. According to WB estimates, Vietnam has received an average of 17-18 billion USD in remittances each year in the past 3 years. In the past 10 years, remittances have become a "bright spot" for Vietnam and maintained its position in the top 10 countries with the largest remittances in the world and in the top 3 countries receiving the most remittances in the Asia-Pacific region.

It can be said that, along with the domestic financial and monetary policies flexibly managed by the Government to promote economic development, remittances are an important resource that Vietnam receives every year. In particular, along with the FDI capital flow, the amount of remittances sent back has significantly contributed to helping Vietnam increase foreign currency sources, meeting domestic demand. From there, Vietnam has more resources to maintain a stable exchange rate policy and increase national foreign exchange reserves.

In 2023, the global economy is facing difficulties, so it is normal for the cash flow of Vietnamese people returning to Vietnam to decrease. However, the remittance level of 16 billion USD is very high according to economic expert, Associate Professor, Dr. Dinh Trong Thinh. This shows the trust of overseas Vietnamese in the stable macroeconomic situation and favorable investment and business environment in the country, along with the mechanisms and policies of the Government and the State Bank of Vietnam on attracting remittances. In addition, many new policies to encourage capital attraction in the production and business sectors are also one of the fundamental factors to attract this "golden resource" to Vietnam. "This is a large source of capital to supplement investment in the domestic private economic sector. This has greatly contributed to ensuring the lives of many families and supporting social security in the country," Associate Professor, Dr. Dinh Trong Thinh affirmed.

Creating conditions to attract "golden resources"

According to the State Committee for Overseas Vietnamese, the overseas Vietnamese community has about 6 million people, with a growth rate of about 5%/year. Overseas Vietnamese currently live in more than 130 countries and territories, of which 80% are in developed countries. This is a favorable factor to promote remittance growth in the coming time.

In order to attract "golden resources", in recent times, commercial banks have implemented many programs with attractive incentive policies to attract remittances such as Vietcombank, Agribank, Sacombank, BIDV, ... especially at the end of the year and Lunar New Year. For example, at Agribank, from December 15, 2023 to February 15, 2024, all customers will immediately receive a gift worth 100,000 VND after completing a transaction to receive or transfer money via Western Union at Agribank's transaction counters nationwide.

The increasing amount of remittances to Vietnam not only helps banks increase profits from service activities, but also serves the policy of attracting foreign currency to increase national foreign exchange reserves. Not only that, remittances transferred through commercial banks also help these banks increase access to households, on that basis, they will develop retail to each poor person in rural areas, promote savings, and effective investment from remittances.

Financial and banking expert, Dr. Nguyen Tri Hieu, acknowledged that remittances play an important role in the country's economy. However, to attract remittances, the State needs to provide full and clear information about investment opportunities in Vietnam to overseas Vietnamese. At the same time, agencies and departments supporting overseas Vietnamese when they return to Vietnam need to ensure good health, security, visa issues, etc. As for those who receive remittances sent by overseas Vietnamese, they should also be encouraged to use part of the money for consumption, and the rest to invest in projects in Vietnam.

From another perspective, Associate Professor, Dr. Dinh Trong Thinh said that in order to increase the attraction of "golden resources", in the coming time, the Government and management agencies need to continue to create a stable macroeconomic environment, increasingly open investment policies, reform administrative procedures,...

In addition, many economic experts also recommend that Vietnam needs to gradually orient to improve the quality of its labor force and instill high discipline in workers working abroad. In addition to what has been done and is being done such as stabilizing the currency and foreign exchange markets, the Government needs to gradually improve the legal framework to support investment activities, expand production and business to see the effectiveness of transferring foreign currency back to the country, contributing to many economic and social security benefits.

As for commercial banks, they need to have policies such as supporting capital sources for workers, preferential fees, exchange rates, savings interest rates, and applying technology to ensure fast, safe, and secure transactions to facilitate overseas Vietnamese to transfer money back home, contributing to limiting the flow of remittances through unofficial and difficult-to-control channels.

According to Nhan Dan Newspaper

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