Top recipients of remittances in 2019 (Photo: WB)Hanoi (VNS/VNA) – Vietnam is expected to remain one of the top tenremittance receivers in 2019, according to the latest edition of the WorldBank’s Migration and Development Brief released recently.
A sum of 16.7 billion USD in remittances was projected to flow into Vietnam forthe full year, making the Southeast Asian country the ninth largest remittancereceiver – in dollar terms – in the world.
The value inches up against 16 billion USD in 2018 and accounts for some 6.4percent of the country’s GDP.
In East Asia and Pacific region, Vietnam is expected to rank third in terms ofremittances after China and the Philippines.
Financial and banking expert Nguyen Tri Hieu said that the country’s highremittance flow was mainly because Vietnamese people working abroad believed inthe stability of the economy and saw better investment opportunities in thedomestic market.
He said that remittances to Vietnam were largely used to invest in production,business and the real estate market.
“The central bank’s policy to keep zero interest rate for deposits in US dollarwill encourage remittances into Vietnam to be used for investment rather thanbeing kept in banks,” Hieu said.
Remittances to Vietnam have kept rising for the past two decades, from morethan 1.3 billion USD in 2000 to 16 billion USD last year (except the year of2009 due to adverse impacts of the global financial crisis).
According to the WB’s brief, in 2019, the top five remittance recipientcountries are projected to be India (82.2 billion USD), China (70.3 billion USD),Mexico (38.7 billion USD), the Philippines (35.1 billion USD) and Egypt (26.4billion USD).
Remittance flows to low- and middle-income countries are expected to reach 551billion USD in 2019, up by 4.7 percent compared to 2018. Remittances haveexceeded official aid – by a factor of three – since the mid-1990s. This year,they are on track to overtake foreign direct investment (FDI) flows to LMICs.
This year, remittances will increase moderately in South Asia (5.3 percent),Sub-Saharan Africa (5.1 percent) and East Asia and Pacific (3.8 percent) due tothe buoyancy in inflows from the US being offset by slower growth of receiptsfrom the Euro area and the Gulf Cooperation Council (GCC).
Growth of remittance flows slowed to 4.7 percent in 2019 compared to a robust8.6 per cent in 2018, the brief noted, adding that cyclical factors affectingthe growth of remittance flows include economic growth in source countries, oilprice and variations in exchange rates.
According to the brief, assuming that outward remittances growth in tandem withthe nominal GDP (in US dollar terms) of the source countries, these flows areprojected to reach 574 billion USD in 2020 and 597 billion USD by 2021.
This forecast methodology is conservative, as it does not account forincreasing migration flows, falling remittance costs, and progress in thetechnology of remittance services, the brief noted./.
VNA
