Reasons for the sharp decline in remittance inflows to Ho Chi Minh City

Global economic recovery remains slow and unstable, inflation has risen in many countries, and geopolitical tensions in the Middle East have all contributed to a sharp decline in remittance inflows to Ho Chi Minh City.

On April 18, Ms. Tran Thi Ngoc Lien, Deputy Director of the State Bank of Vietnam (SBV) Ho Chi Minh City Branch 2, said that remittances sent through credit institutions and economic organizations in the Ho Chi Minh City area in the first quarter reached over 2.004 billion USD. This was down 15.6% compared with Q4 2025 and down 16.9% versus the same period in 2025.

Remittances fall from Q4 2025 into early 2026

SBV Region 2 data show remittance flows declined from Q4 2025 into the early part of this year. In Q4 2025, remittances via credit institutions and economic organizations in the area were nearly 2.38 billion USD, down 13.3% quarter-on-quarter. In the just-ended Q1, remittances fell to just over 2 billion USD, equivalent to a 15.6% drop from the previous quarter.

Key factors behind the decline

Ms. Lien said the Q1 decrease reflects the combined impact of international and domestic economic conditions and geopolitical factors.

• Overseas workers’ income affected by global conditions: The slow and unstable recovery of the global economy has directly affected the income of overseas Vietnamese. Inflation in many countries remains high, and the cost of living continues to rise.
• Tighter monetary policy in major economies: Prolonged monetary tightening in major economies has continued to weigh on production and business activity, thereby affecting incomes and the money sent back home.
• Middle East geopolitical conflict: The conflict increases energy price volatility, adds pressure to global inflation, and affects workers’ real incomes. In some Middle Eastern countries where Vietnamese workers are employed, local economic activity may be disrupted, reducing employment and income and, in turn, remittance capacity.

SBV representatives noted that the share of remittances from the Middle East is not large, so the impact is mostly indirect and supportive rather than the main cause.

Domestic considerations and seasonal effects

Domestically, while the macroeconomy remains stable, some investment channels are not very attractive for remittance flows. In addition, the spread between VND and USD is not large, which partly influences decisions to repatriate funds.

There is also a seasonal factor: after the peak remittance period around year-end festivals, remittance amounts in the first quarter typically trend lower, making the year-on-year decline more pronounced.

Outlook

Ms. Lien said remittance flows may not rise sharply in the near term because they depend on developments in both the global and domestic economy. Typically, after the low point early in the year, remittances tend to recover slightly in subsequent quarters as overseas workers’ employment and the economy gradually stabilize after holidays.

However, the ongoing conflict in the Middle East and other regions remains complex, continuing to affect energy prices, inflation, and market sentiment, which can influence global economic conditions and incomes and potentially reduce expatriates’ savings capacity—factors that could keep remittances on a downward trend.