Over $6.6 billion in remittances were sent to Ho Chi Minh City (HCMC) last year, a 6.7% year-on-year decline due to the effect of the global economic slowdown.

According to the State Bank of Vietnam, soaring inflation, the economic slowdown, and geopolitical concerns are fuelling the fall in remittances into Ho Chi Minh City.

Yet over the last few years, HCMC has registered a yearly increase in remittances of between 7% and 10%, VN Express reports.

Several factors influence this growth, such as macroeconomic conditions, employment of Vietnamese citizens abroad and the availability of services intended to attract remittances.

Within the last two years, the volume of remittances transferred to Ho Chi Minh City has declined as a result of the pandemic and the war in Ukraine. Nevertheless, remittances account for 33% of HCMC’s budget revenue.

As well as foreign direct investment inflows and foreign currency revenue from exports, remittances are a major source of foreign currency revenue. These help boost national foreign exchange reserves and ensure foreign currency supply and demand.

Over the last decade, remittances sent to Vietnam surpassed $10 billion each year, and despite the impact of the pandemic in 2021, remittances during that year hit $12.5 billion.

In 2019, remittances to the country reached $16.7 billion, $16 billion in 2018, and around $14 billion in 2017.

Furthermore, the World Bank and the Global Knowledge Partnership on Migration and Development forecast the total amount of remittances to Vietnam last year would increase by approximately 4.4% from 2021 and between 3.6% and 4.5% in 2023.