Vietnam: Covid-19 hits remittances to Vietnam

  • Overseas remittances are expected to fall short of the target in 2020 due to the economic crisis caused by the Covid-19 pandemic and shutdowns around the world.
  • Nguyễn Hoàng Minh, deputy director of the State Bank of Vietnam’s HCM City office, said in the Jan 20 to Jul 20 period, year total remittances to the city, usually the largest recipient in the country, were down 1.2% y/y to USD3bn.
  • Vietnam has been among the top 10 recipients in the world for the last three years. In 2019 its remittances topped USD16.7bn, of which USD5.3bn came to HCM City.
  • Money transfer companies said in 1H20 the strongest drops in remittances to the city were from Vietnam’s key labour markets such as Japan, Taiwan and South Korea, and other key countries such as the US, UK and Canada.
  • Dr Cấn Văn Lực of the Bank for Investment and Development of Vietnam expected remittances to drop by 10-15% in 2020, but could be even worse if the pandemic continues having bad changes happenings.
  • Many analysts say the global pandemic has shown few signs of ending, while Vietnam is facing a second wave, and this could cause remittances to fall by up to 40% in the worst-case scenario.
  • According to the United Nations Development Programme, 60% of remittances to Vietnam comes from the US, which accounts for 50% of all overseas Vietnamese. Europe accounts for around 20% while other major sources are China, South Korea and Japan.
  • The incomes of overseas Vietnamese living in the US has been badly affected, limiting transfer of money to their families.

External Link :