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The slow and uneven recovery of the global economy, high inflation in many countries, and geopolitical tensions in the Middle East are among the factors contributing to a sharp drop in remittance inflows to Ho Chi Minh City.
On the afternoon of April 18, Trần Thị Ngọc Liên, Deputy Director of the State Bank of Vietnam (SBV) Branch in Region 2, said that remittances routed through credit institutions and economic entities in Ho Chi Minh City in Q1 reached over 2.004 billion USD, down 15.6% from Q4 2025 and down 16.9% year-on-year.
SBV Region 2 statistics show remittance flows have been trending lower from Q4 2025 into the early part of this year. In the last quarter of 2025, remittances sent via credit institutions and local economic entities in the area reached nearly 2.38 billion USD, down 13.3% from the preceding quarter.
In Q1, remittance flows dropped to just over 2 billion USD, corresponding to a 15.6% decrease from the previous quarter.
According to Ms. Liên, the decline in Q1 reflects the impact of multiple factors in the context of the international and domestic economy and geopolitical considerations.
First, the global economy’s slow and unstable recovery has directly affected the income of Vietnamese people abroad. Inflation in many countries remains high, and the cost of living is rising.
Second, the prolonged tightening monetary policies of major economies continue to weigh on production and business activity, indirectly affecting income and cash remittance flows back to Vietnam.
Third, geopolitical tensions in the Middle East also contribute to remittance flows. These conflicts raise energy price volatility, exert global inflationary pressure, and influence workers’ real income.
In some Middle East countries where Vietnamese workers are employed, economic activity may be disrupted, affecting employment and income and thus reducing the ability to transfer funds home. However, SBV representatives said the region’s remittance share is not large, so the impact is largely indirect and supplementary rather than the main cause.
Domestically, macroeconomic conditions remain stable, though some remittance channels are not particularly attractive. The spread between VND and USD interest rates is not wide, which partly influences decisions to repatriate funds.
Seasonal factors after the peak remittance period at year-end for holiday spending also contribute to the quarterly decline in Q1, making year-on-year declines more pronounced.
Ms. Liên expects remittance flows in the near term may not show a clear uptrend, as they depend on global and domestic economic developments.
Typically, after the early-year lull, remittances tend to recover gradually in subsequent quarters as overseas workers’ employment and economic activity stabilize after holidays.
Nevertheless, ongoing Middle East conflicts and other regions remain complex and could continue to affect energy prices, inflation, and market sentiment, broadly impacting the global economy, workers’ incomes, and the accumulation of remittances by the Vietnamese diaspora—potentially keeping remittance flows under pressure.
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