### Vietnam’s Inflation Outlook: A Mixed Bag for 2025
Vietnam has navigated the first half of 2025 with inflation rates remaining within target, yet several external factors are creating uncertainty about the inflation trajectory for the remainder of the year. A blend of fluctuating exchange rates, volatile oil prices, and geopolitical tensions could significantly affect economic stability.
### CPI Shows Moderate Increases Amid Manageable Pressure
The consumer price index (CPI) in Vietnam saw a year-on-year rise of 3.27% during the first half of 2025, slightly above the average of 2.81% recorded from 2015-2024. Core inflation, which strips out volatile items, stood at 3.16%. According to the General Statistics Office under the Ministry of Finance, key contributors to this increase included essential services like healthcare and housing-related costs—namely, expenditures on electricity, water, and construction materials.
Dr. Nguyen Duc Do, Deputy Director of the Institute of Economics and Finance, remarked that despite the rise in inflation, pressures remain manageable. Notably, global commodity prices, which have been in decline, alongside a 1.57% drop in import prices, have played a crucial role in easing domestic inflationary pressures.
Looking ahead to the second half of 2025, Dr. Do anticipates inflationary pressures to remain moderate. Sluggish export performance—particularly to the U.S. due to newly imposed tariffs and a broader slowdown in global growth—is likely to increase domestic supply and mitigate price hikes. If monthly CPI increases average around 0.27%, consistent with historical patterns, the full-year inflation could hover around 3.4%. Should international trade tensions intensify, it may drop to 3%.
### Rising Inflation Risks Amid External Challenges
However, various risks loom on the inflation horizon. Dr. Do cited credit growth and exchange rate pressures as significant concerns. The Vietnamese government has set an ambitious target of 16% credit growth for 2025, with the State Bank of Vietnam tasked with sustaining low interest rates to support an 8% GDP growth target. This scenario raises the risk of money supply expansion outpacing nominal GDP growth, leading to upward pressure on prices.
The impact of increased tariffs on exports poses additional pressure on Vietnam’s exchange rate and, consequently, inflation. Nguyen Thu Oanh, Head of Price and Service Statistics at the General Statistics Office, noted persistent global inflationary pressures despite some easing since the peaks of 2022-2023.
Volatile commodity prices, geopolitical tensions driving up oil prices, increased shipping costs due to global disruptions, and climate-related risks to food prices further complicate the situation. Vietnam’s dependence on imported raw materials makes it particularly vulnerable; rising global prices coupled with a stronger U.S. dollar could escalate both import costs and domestic prices.
Other inflationary drivers include increased public spending from economic stimulus programs, a robust rebound in tourism, and a surge in domestic demand. Should credit growth accelerate markedly, it might trigger demand-pull inflation.
### The Importance of Policy Coordination
To address these multifaceted risks, experts emphasize the necessity of tightly coordinated macroeconomic policies. Oanh highlighted the importance of closely monitoring global inflation trends while providing prompt alerts to protect domestic price stability. Authorities must ensure the prices of essential goods—such as food, fuel, and gas—remain stable, particularly during peak demand periods and holidays, while also addressing speculation and misinformation in the market.
Implementing flexible monetary strategies will be crucial in meeting inflation targets while simultaneously supporting production and livelihoods. Dr. Nguyen Quoc Viet, former Deputy Director of the Vietnam Institute for Economic and Policy Research (VEPR), noted that significant risks remain from global energy prices. A spike in oil prices would lead to increased domestic fuel costs and production input prices, pushing overall price levels higher. Rising international transportation costs are another considerable threat.
To counter part of these risks, Viet advocates for diversifying supply chains and maintaining stable domestic energy prices through adaptive tax policies. Achieving macroeconomic stability will not only depend on adept monetary policies, he argues, but also on ensuring consistent supply, fostering market confidence, and reinforcing economic resilience.