Overseas Vietnamese labor in Asia drives remittance growth

In an interview with VnExpress, Dao Xuan Tuan, deputy director general of the State Bank of Vietnam’s Foreign Exchange Management Department, said inward remittance set a new record of US$1.6 billion last year, up 32% from 2022.

Remittances to Ho Chi Minh City also reached $9.5 billion, accounting for nearly 60% of the country’s total.

This marks both a record-high inward remittance and a 10-year high remittance growth for the city.

Experts believe the surge in Vietnam’s labor export in recent years is one of the main reasons behind this positive development.

Tran Minh Khoa, president of SBR - private lender Sacombank's remittance subsidiary, said the number of Vietnamese working and studying abroad rose by 158,000 last year, higher than the average of 130,000-150,000 per year.

"This is an essential factor contributing to the growth of remittances to Vietnam," he said.

In the context of the global economy, the main driving force behind the growth of remittances in 2023 was Vietnamese workers in the Asia region.

Meanwhile, remittances from the African and American regions either decreased or barely increased.

Asia contributed over half the remittances to HCMC, up 140% from 2022.

The region’s booming labor market and political and economic stability facilitate the growth of remittances to Vietnam, according to Nguyen Duc Lenh, deputy director of the State Bank of Vietnam’s HCMC office.

Concurring with this, Khoa added that the region, especially its three largest labor markets: Japan, South Korea, and Taiwan, would play an increasingly important role in the flow of remittances into Vietnam.

As the U.S. and Europe face high inflation and geopolitical instability due to the impact of the Russia-Ukraine and Israel-Hamas conflicts, remittances from overseas Vietnamese in these regions lagged behind those in Asia.

Lenh said inward remittance helps ensure the supply-demand balance of foreign currencies and provides support for monetary policies, exchange rates, and the foreign exchange market.

According to Global Knowledge Partnership on Migration and Development, Vietnam is one of the 20 countries that received the most remittances in 2023, trailing behind only India, Mexico, China, the Philippines, France, Germany, and Ukraine.

This year, the State Bank of Vietnam’s HCMC office expects inward remittance to increase by 20% as the global economy is forecast to transform after the pandemic.