Transforming seasonal foreign inflows into long-term growth

Every year, as Lunar New Year approaches, Vietnam experiences a familiar but often underappreciated economic phenomenon: a surge in remittances from overseas Vietnamese and migrant workers.

- By Samir Dixit Global head Acorn Management Consulting

By Samir Dixit Global head Acorn Management Consulting

workforce and diaspora.

As Vietnam enters 2026, which is a year expected to bring continued monetary and fiscal fine-tuning, the question is no longer whether remittances matter, but how effectively they are being used.

Remittance inflows into Vietnam are somewhat seasonal. The period from December to February, leading up to and including Lunar New Year, consistently records the highest volumes.

This seasonality brings both benefits and challenges. On the positive side, remittances provide counter-cyclical household support. They stabilise consumption, especially during periods of higher living costs or economic uncertainty. For the financial system, they deliver predictable foreign currency inflows at a critical time of year.

However, the concentration of inflows around Lunar New Year also creates distortions. Large sums arrive within a short window and are often used or deployed quickly, primarily for household consumption or property purchases. This limits the economy's ability to channel remittances into any kind of longer-term, productivity-enhancing investments.

Even if the remittances arrive steadily across the year, their economic impact peaks briefly and fades too quickly around the festive period.