Nguyen Hoang Minh, deputy director of the State Bank of Vietnam (SBV), said that remittance sales to the city in the first seven months of this year reached $3 billion, declined by 1.2 percent compared to the same period last year.
In 2019, the total amount of remittances transferred to Hochiminh City reached $5.3 billion. Due to the impact of the Covid-19 epidemic, the remittances to Hochiminh City in 2020 might decrease. Remittance companies in HCM City said that remittances in the first two quarters of 2020 decreased significantly, especially from labour export markets such as Japan, Taiwan (China) and South Korea, and the one from traditional countries like USA, UK, Canada, Australia.
The World Bank also predicted that global remittances would decrease by about 20 percent in 2020 due to the Covid-19 effect, of which the East Asia and Pacific region would decrease by 13%.
Even, according to some companies, overseas national currency exchange had dropped sharply, which in some places declined by 50 percent over the same period. This was due to the significant impact of Covid-19 to major remittance markets of Vietnam, such as the US, UK and Canada.
The Covid-19 pandemic caused many foreign workers to lose their jobs, had to take time off from home, the business stopped, leading to a decrease in remittances for relatives. Remittance companies forecasted that remittance sales would continue to decline in the next quarter and be challenging to achieve the same result as last year if the epidemic were not over.
Can Van Luc, a chief economist of Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), said that the amount of remittance flowing to Vietnam in 2020 might fall by 10 percent to 15 percent compared to 2019. The decrease might be at about 15 percent to 17 percent if the epidemic kept going badly.
The World Bank estimated that global remittances would decrease by about 20 percent due to the Covid-19 influence, of which the East Asia and Pacific region would reduce by 13%, mainly due to the decline in cash flows from the US, which was the largest source of remittances in this area.
In Vietnam, in addition to the major remittance markets, emerging markets thanks to increased labour export forces, such as Japan, South Korea, were also affected by Covid-19, so the amount of overseas money transferred also decreased. Remittance companies assessed that remittance sales would continue to decline in May and June before recovering.
The forecast of remittance flows to all areas of the World Bank Group would decrease, most notably in Europe and Central Asia (27.5%), followed by Sub-Saharan Africa ( 23.1%), the Middle East and North Africa ( 19.6%), Latin America and the Caribbean (19.3%), and East Asia and the Pacific (13%).
In 2020, the amount of remittance flowing into South Asia could also decrease by 22%, to $109 billion, after increasing by 6.1 percent in 2019. This was the result of the global economic downturn due to the diseases outbreak and declining oil prices. However, the World Bank estimated that, in 2021, the amount of remittance flowing into low and middle-income countries would recover and increase by 5.6 percent to $470 billion. Nevertheless, this outlook was uncertain, depending on Covid-19′s impact on global growth and measures to curb the spread of disease.
