Inspiring inward remittances despite challenging 2022

A report compiled by the World Bank in tandem with the Global Knowledge Partnership on Migration and Development has highlighted that despite the detrimental impacts on the development landscape globally over the past two years and spiking inflation in many parts of the world, the flow of overseas remittances into Vietnam has proven stable.

In 2021, Vietnam ranked eighth worldwide and third in the Asia-Pacific region setting an $18.1 billion record for inward remittances, higher than the $12.5 billion level announced by the State Bank of Vietnam (SBV).

The funds sent back to Vietnamese families from abroad have surpassed the $10 billion mark in the past decade and nearly doubled compared to the previous decade.

According to the report, after surging by 5 per cent in 2021, the inward remittance volume is expected to inch up by 4.4 per cent in 2022 and 3.6-4.5 per cent in 2023.

According to Nguyen Duc Lenh, deputy director of SBV’s Ho Chi Minh City Branch, as many world economies have faced high inflation, depreciating currencies, and decreasing incomes, stable inward capital flow into Vietnam has been significant to the country’s socioeconomic development generally and that of Ho Chi Minh City in particular.

After surging by 5 per cent in 2021, the inward remittance volume is expected to inch up by 3.6-4.5 per cent in 2023.

The southern growth engine received an estimated $6.8 billion in inward remittance last year.

DongA Money Transfer Co., Ltd. reported that the flow into Vietnam was affected by the gloomy economic picture in the first half of last year, yet the situation became better in the second half, contributing to a positive overseas remittance picture for the whole year.

Sacombank Remittance Express Co., Ltd. (SBR) reported that more than $2 billion of inward remittance was transferred through Sacombank and SBR last year.

Many bank executives shared that the amount of money sent back to families in Vietnam during the traditional Lunar New Year often surges by 10-15 per cent compared to normal months.

Economist Nguyen Tri Hieu believes that the state needs to craft policy breakthroughs aimed at overseas Vietnamese and inward remittances.

Accordingly, Hieu suggested that the Law on Housing be more relaxed allowing more overseas Vietnamese to buy property in Vietnam, thus enhancing their attachment to their homeland.

Besides simplifying investment registration procedures, in the coming time, he feels that state management agencies should engage in studying foreign experience to more effectively avail of inward remittance sources, including forming specialised inward remittance funds earmarked to support small- and medium-sized enterprises and aid startups.

To prepare for the peak period for inward remittance before the Tet holiday, banks and money transfer companies are scaling up their technology investments and opening thousands of service points to assist the beneficiaries.

Despite a challenging 2022, many businesses beat the headwinds and ended the year with a bang.

Vietnam’s innovation startup ecosystem is forecast to see an investment of $2 billion, according to the Vietnam Open Innovation Ecosystem Report 2022, and aspiring startups are making great strides to bring distinct products from their homeland to supermarket shelves at home and abroad.