Remittances to Hochiminh City in 8 months reach $3.5b

22-Sep-2020 Intellasia | Dau tu Chung khoan | 6:02 AM Print This Post

The remittance turnover to Hochiminh City in the first eight months of this year reached $3.5 billion, increasing by $500 million from the previous month, decreasing slightly compared to last year. That information had just been provided by Nguyen Hoang Minh, deputy director of the State Bank of Vietnam (SBV), Hochiminh City branch, to the reporter of Securities Investment Newspaper.

In 2019, the total amount of remittances transferred to Hochiminh City had reached $5.3 billion. It was expected that remittances to Hochiminh City this year would not reach less than $ 5 billion. However, due to the impact of the Covid-19 epidemic this year, the source of remittances would decline sharply.

Remittances companies in Hochiminh City also said that remittances in the first eight months of this year decreased significantly, especially from labour export markets such as Japan, Taiwan (China), Korea, or from traditional countries such as the USA, UK, Canada, Australia.

According to some companies, the number of remittances in some places decreased by 50 percent year-on-year because the Covid-19 epidemic had heavily influenced major remittance markets of Vietnam, such as the US, UK, and Canada..

The Covid-19 epidemic caused many overseas workers to lose their jobs, to stay at home temporarily, and business activities stagnated, leading to a decrease in remittances to their relatives. The remittance companies forecasted, the remittance sales would continue to decline in the next quarter and difficult to reach as last year if the epidemic did not end.

Can Van Luc, Chief Economist of Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), said that the source of remittances flowing to Vietnam in 2020 might decrease by 10 percent to 15%. However, it could be further reduced by 15 percent to 17 percent if the disease continued to go bad.

The World Bank predicted that global remittances would decrease by about 20 percent due to the influence of the disease, of which the East Asia and Pacific region decreased by 13%, mainly due to the decline in cash flows from the US, which was the largest source of remittances in this area.

The World Bank also predicted that the number of global remittances in 2020 would decrease by about 20 percent due to the Covid-19 influence, of which the East Asia and Pacific region would decrease by 13%.

In Vietnam, in addition to the main remittance markets, emerging markets, thanks to increased labour export force such as Japan, South Korea, were also affected by the epidemic, so the remittance decreased. The remittance companies forecasted that remittance sales would continue to decline in May and June before recovering.

It was likely that remittances flow to all regions of the World Bank Group would decrease, most notably Europe and Central Asia (27.5%), followed by Sub-Saharan Africa (23.1%), and China. East and North Africa (19.6%), Latin America and the Caribbean (19.3%), and East Asia and the Pacific (13%).

In 2020, the number of remittances flowing into South Asia might decrease by 22 percent to $109 billion, after increasing by 6.1 percent in 2019. This resulted from the global economic slowdown due to the outbreak of the disease and the oil price plummet.

However, the World Bank estimated that by 2021, remittances flowing into low-income and middle-income countries would recover and increase by 5.6 percent to $ 470 billion. Nevertheless, this prospect was uncertain, depending on the Covid-19 epidemic’s impact on global growth and the measures to curb the spread of the disease.

 


Category: Finance, Vietnam

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