Illustrative image (Photo: Xinhua) Hanoi (VNS/VNA) - Overseas remittances are expected to fall short of the target thisyear due to the economic crisis caused by the COVID-19 pandemic and shutdownsaround the world.
Nguyen Hoang Minh, DeputyDirector of the State Bank of Vietnam’s HCM City Branch, said in the firstseven months of the year total remittances to the city, usually the largestrecipient in the country, were down 1.2 percent year-on-year to 3 billion USD.
Vietnam has been amongthe top 10 recipients in the world for the last three years. Last year itsremittances topped 16.7 billion USD, of which 5.3 billion USD came to HCM City.
Money transfercompanies said in the first two quarters the strongest drops in remittances tothe city were from Vietnam’s key labour markets such as Japan, Taiwan and theRepublic of Korea, and other key countries such as the US, UK and Canada.
Some reported up to a50 percent decline in the money transferred through their companies.
Remittances fromEurope were down the most followed by the US, Canada and Australia,they said.
Dr Can Van Luc of theBank for Investment and Development of Vietnam (BIDV) expected remittances todrop by 10-15 percent this year, but could be even worse if the pandemiccontinues having bad changes happenings.
Many analysts say theglobal pandemic has shown few signs of ending, while Vietnam is facing a secondwave, and this could cause remittances to fall by up to 40 percent in theworst-case scenario.
According to theUnited Nations Development Programme (UNDP), 60 percent of remittances to Vietnamcomes from the US, which accounts for 50 percent of all overseas Vietnamese.Europe accounts for around 20 percent while other major sources are China, theRepublic of Korea and Japan.
Dr Nguyen Tri Hieu, abanking analyst, said a majority of the overseas remittances comes from ethnicVietnamese nationals of other countries.
Because of thepandemic many of them have lost their jobs or seen their businesses hit.
The World Bank expectsglobal remittances to fall by 20 percent this year, with East Asia and thePacific seeing a 13 percent decrease. This would be the largest single-yeardecline in remittances in a century. The last global financial crisis sawremittances drop by 5 percent in 2009, the bank said.
The World EconomicOutlook has forecast global growth in 2020 of minus 4.9 percent, a further 1.9percentage points down from the April prognostication.
The pandemic has had agreater impact on activity in the first half than anticipated, and the recoveryis projected to be more gradual than previously forecast.
The US’s GDP decreasedat an annual rate of 32.9 percent in the second quarter of 2020, according tothe "advance" estimate released by the country’s Bureau of EconomicAnalysis. In the first quarter the GDP had decreased by 5 percent.
The incomes ofoverseas Vietnamese living in the US has been badly affected, limiting transferof money to their families.
The World Bankestimates that in 2021 remittances to low and medium income countries willrecover and rise by 5.6 percent to 470 billion USD. But the outlook remains asuncertain as the impact of COVID-19 on the outlook for global growth.
Vietnamese experts toobelieve that remittances to the country will depend on how countriesaround the world combat the pandemic./.
Nguyen Hoang Minh, DeputyDirector of the State Bank of Vietnam’s HCM City Branch, said in the firstseven months of the year total remittances to the city, usually the largestrecipient in the country, were down 1.2 percent year-on-year to 3 billion USD.
Vietnam has been amongthe top 10 recipients in the world for the last three years. Last year itsremittances topped 16.7 billion USD, of which 5.3 billion USD came to HCM City.
Money transfercompanies said in the first two quarters the strongest drops in remittances tothe city were from Vietnam’s key labour markets such as Japan, Taiwan and theRepublic of Korea, and other key countries such as the US, UK and Canada.
Some reported up to a50 percent decline in the money transferred through their companies.
Remittances fromEurope were down the most followed by the US, Canada and Australia,they said.
Dr Can Van Luc of theBank for Investment and Development of Vietnam (BIDV) expected remittances todrop by 10-15 percent this year, but could be even worse if the pandemiccontinues having bad changes happenings.
Many analysts say theglobal pandemic has shown few signs of ending, while Vietnam is facing a secondwave, and this could cause remittances to fall by up to 40 percent in theworst-case scenario.
According to theUnited Nations Development Programme (UNDP), 60 percent of remittances to Vietnamcomes from the US, which accounts for 50 percent of all overseas Vietnamese.Europe accounts for around 20 percent while other major sources are China, theRepublic of Korea and Japan.
Dr Nguyen Tri Hieu, abanking analyst, said a majority of the overseas remittances comes from ethnicVietnamese nationals of other countries.
Because of thepandemic many of them have lost their jobs or seen their businesses hit.
The World Bank expectsglobal remittances to fall by 20 percent this year, with East Asia and thePacific seeing a 13 percent decrease. This would be the largest single-yeardecline in remittances in a century. The last global financial crisis sawremittances drop by 5 percent in 2009, the bank said.
The World EconomicOutlook has forecast global growth in 2020 of minus 4.9 percent, a further 1.9percentage points down from the April prognostication.
The pandemic has had agreater impact on activity in the first half than anticipated, and the recoveryis projected to be more gradual than previously forecast.
The US’s GDP decreasedat an annual rate of 32.9 percent in the second quarter of 2020, according tothe "advance" estimate released by the country’s Bureau of EconomicAnalysis. In the first quarter the GDP had decreased by 5 percent.
The incomes ofoverseas Vietnamese living in the US has been badly affected, limiting transferof money to their families.
The World Bankestimates that in 2021 remittances to low and medium income countries willrecover and rise by 5.6 percent to 470 billion USD. But the outlook remains asuncertain as the impact of COVID-19 on the outlook for global growth.
Vietnamese experts toobelieve that remittances to the country will depend on how countriesaround the world combat the pandemic./.
VNA
