- Vietnam's economy rebounded strongly in 2024 and early 2025. However, the outlook is constrained by high global uncertainty on trade and economic policies.
- There is room for greater fiscal support if economic growth slows down markedly, while space for monetary easing is limited. Allowing more flexibility in the exchange rate and strengthening the resilience of the financial sector will be important.
- Implementation of the ambitious reform agenda and infrastructure improvements presents an opportunity to raise medium-term growth and reduce external vulnerabilities.
Washington, DC: On September 8, 2025, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation [1] with Vietnam. The authorities need more time to consider the publication of the Staff Report prepared for this consultation. [2]
The Vietnamese economy rebounded strongly in 2024, growing at 7.1 percent backed by robust exports, resilient foreign direct investment, and supportive policies. This momentum continued into the first half of 2025, with economic activity expanding by 7.5 percent (y/y) thanks to export frontloading, faster credit growth, and large one-off government spending. Inflation accelerated somewhat in recent months, reaching 3.6 percent y/y in June, but remains below the target. The current account surplus reached a record 6.6 percent of GDP in 2024.
The outlook is heavily dependent on the outcome of trade negotiations and is constrained by elevated global uncertainty on trade policies and economic environment. Economic growth is projected to slow to 6.5 percent in 2025 and decelerate further in 2026 given the full year effect of the new U.S. tariffs (announced in July) and unwinding of most of the one-off 2025 government stimulus.
Downside risks are high. A further escalation in global trade tensions or a tightening of global financial conditions could weaken further exports and investment. Domestically, financial stress could re-emerge from tighter financial conditions and high corporate indebtedness. On the upside, successfully implementing infrastructure projects and structural reforms could significantly boost medium-term growth. If global trade tensions subside, the economic outlook would improve.
Executive Board Assessment [3]
Executive Directors broadly agreed with the thrust of the staff appraisal. They welcomed that, despite increased external and domestic volatility, economic growth has been remarkably resilient helped by supportive policies. Directors cautioned, however, that the economy's export‑led growth model faces increasing challenges from rapidly evolving and uncertain global trade policies, population aging, tightening global financial conditions, and climate change. They emphasized that policies should focus on maintaining economic resilience and financial stability, while promoting reforms to sustain robust, diversified, and stable medium‑term growth.
Directors generally agreed that the policy mix should remain flexible to respond to a fast‑evolving and uncertain economic environment. Given available fiscal space, fiscal policy could be more prominent in prudently supporting economic activity, especially with temporary and targeted support if needed. Directors underscored that the room to ease monetary policy is very limited, and inflation and FX risks should be closely monitored given still buoyant economic and credit growth. They stressed that greater exchange rate flexibility is critical to facilitate the adjustment to external shocks, and underlined the benefits of accelerating the modernization of the monetary policy framework to better manage the risks.
Directors emphasized that strengthening the medium‑term fiscal framework is crucial for reaping the growth dividends from the planned large public investment while safeguarding debt sustainability. They agreed that it will be important to upgrade public investment management, enhance revenue mobilization, increase fiscal transparency and better manage risks, including from public‑private partnerships.
Directors underscored the need to bolster the financial sector's resilience against shocks. The priority should be building liquidity and capital buffers and improving the macroprudential toolkit. Directors also called for further upgrading the insolvency, crisis preparedness and resolution, and AML/CFT frameworks, as well as for advancing the framework for the regulation of crypto assets.
Directors welcomed the authorities' broad reform agenda, while stressing that implementation will be key for success. They called for actions to raise productivity, including improving the business environment and reforming capital and labor markets. Directors recommended further efforts to boost domestic demand and reduce external imbalances, including by investing in upgrading key infrastructure and strengthening social safety nets, while promoting greater trade diversification. The point was made that more emphasis should be placed on discussing the impact of the policy mix on Vietnam's external imbalances and the required policy responses. Directors welcomed the push for major institutional reforms to bolster government efficiency, while stressing the need for further progress on improving economic governance and tackling data gaps, including in the external sector.
It is expected that the next Article IV consultation with Vietnam will be held on the standard 12‑month cycle.
Vietnam: Selected Economic Indicators, 2021–2026 |
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[1] Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.
[2] Under the IMF's Articles of Agreement, publication of documents that pertain to member countries is voluntary and requires the member consent. The authorities have requested additional time to decide on the publication of the staff report. A final decision is expected not later than 28 days from the Board consideration date.
[3] At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm .
