Record remittances bode well for GDP outlook
(VOV) - Every day, Overseas Vietnamese (OVs) wire home money they are able to save to family members and friends. These remittances play a key role in the socio-economic development of the beneficiaries and communities where it is received.
In addition, these monies, termed remittances, stimulate the gross domestic product (GDP) of the country, contribute to the nation’s foreign exchange reserves and are far more stable than monetary inflows from foreign direct investment (FDI).
Dr. Vo Tri Thanh, deputy director of the Central Institute for Economic Management (CIEM) has revealed that for 2014 Vietnam ranks among the world’s top recipients of overseas remittances.
The total remittances to the homeland so far this year have been estimated at US$11-12 billion and will most likely remain unchanged for the next two years Thanh says, and are the equivalent of 8% of the country’s GDP.
Citing a recent survey by CIEM, in the period 2010-2012, around 57% of Vietnam’s remittances came from OVs living in the US followed by those residing in Canada (8.4%), Germany (6%), Cambodia (4%), and France (4%).
The CIEM survey also showed that about 35% of Vietnam’s overseas remittances were used for daily expenses, 16% for business purposes, and with the reminder spent on things like shopping, paying debts and covering fees of healthcare services.
Thanh made the comments on December 17 at a ceremony in Hanoi marking the 20th anniversary of Western Union.