Amidst challenging global conditions, the workforce in Asia has been the driving force behind the record surge in remittances to the country, reaching $16 billion.
Remittances to Vietnam grew slowly during the Covid-19 period, even declining in 2022. However, this flow of money recovered strongly last year, reaching a record high in many years.
Speaking to VnExpress , Mr. Dao Xuan Tuan, Director of the Foreign Exchange Management Department (State Bank of Vietnam), estimated that remittances flowing into the country in 2023 reached approximately 16 billion USD, an increase of 32% compared to the previous year.
Ho Chi Minh City continues to be the locality receiving the most remittances, with nearly 9.5 billion USD, accounting for almost 60% of the national total.
As a region with a large Vietnamese population living, studying, and working abroad, Ho Chi Minh City recorded a more than 40% increase in remittances last year compared to the previous year. This is also the highest growth rate in a decade, partly due to the low base of 2022.
A leading remittance company in the South – Sacombank's Remittance Company ( Sacombank - SBR) – also reported exceptional growth in remittance volume. In 2023, the company recorded a more than 95% increase in remittance volume compared to 2022, the strongest growth in the past five years.
Recognizing this positive development , experts believe that post-Covid-19, some countries have begun to ease immigration restrictions, leading to an increase in the number of Vietnamese workers abroad, which is one of the reasons for the sharp increase in remittances compared to last year.
Mr. Tran Kim Khoa, Chairman of Sacombank-SBR, said that in 2023, the total number of Vietnamese workers going abroad for work and study increased by more than 158,000, an increase of over 11% compared to 2022. "This is an important factor contributing to the increase in remittances sent back to Vietnam," he said.
According to figures provided by the Ministry of Foreign Affairs , there are currently 6 million Vietnamese people living in 130 countries and territories, 80% of which are developed countries. In Ho Chi Minh City alone, there are approximately 2.9 million overseas Vietnamese living and working in various countries.
Amidst challenging global economic conditions, the main driver of remittance growth in 2023 came from the workforce in Asia. Meanwhile, remittances from Africa and the Americas decreased or increased only slightly.
The Asian region accounts for more than half of remittances flowing into Ho Chi Minh City and recorded a growth rate of over 140% compared to 2022. According to Mr. Nguyen Duc Lenh, Deputy Director of the State Bank of Vietnam in Ho Chi Minh City, Asia is a region with economic and political stability, along with increasingly expanding economic relations and labor cooperation. Therefore, this region will have an impact on remittance growth in the coming period.
Sharing this view, Mr. Tran Kim Khoa assessed the increasingly important role of the Asian region in remittances, including the three largest labor markets: Japan, South Korea, and Taiwan. In 2023, when the US, Europe, and other regions faced high inflation and instability due to the Russia-Ukraine and Israel-Hamas wars, remittances to Vietnam, although increasing, were at a slower pace compared to the Asian region.
"Besides that, despite the economic difficulties faced by many countries, overseas Vietnamese are still carefully saving and increasing remittances to support and help their relatives in Vietnam stabilize their lives and develop their family economies. Banks and companies have also boldly invested in technology and improved service quality to attract more of this valuable resource," Mr. Khoa shared.
The Deputy Director of the State Bank of Vietnam in Ho Chi Minh City assessed that remittances are one of the sources contributing to ensuring the supply and demand relationship of foreign currency, while effectively supporting monetary policy, exchange rates, and the foreign exchange market. This is even more significant in the context of fluctuating major currencies, inflation in some countries putting certain pressure on exchange rates and the relationship between exchange rates, interest rates, and inflation.
Remittances sent back to Vietnam from 1993 (the first year remittances were recorded) to 2023 reached over 200 billion USD, placing Vietnam among the top 10 countries in the world in terms of receiving remittances.
Quynh Trang
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