Vietnam on the upswing: Economy is booming despite inflation risks!

Vietnam on the upswing: Economy is booming despite inflation risks!

Vietnam's economy remains robust in 2025, with the General Statistics Office noting positive developments in all economic sectors. Loud Vietnam However, there are also risks that must be taken into account in order to prevent macroeconomic problems. The government has targeted growth of 8% for 2025, while international forecasts, such as those from the IMF at 5.2% and the World Bank at 5.8%, are more cautious.

Vietnam's monetary and fiscal policies have proven stabilizing, with system-wide lending increasing by 5.6% compared to year-end 2024 and 18.7% compared to the same period last year. Average loan interest rates turned to 6.6% per year, encouraging both investment and consumption. In addition, public investment increased by 17.5% to VND222 trillion.

Trade balance and exports

In the first five months of 2025, total import and export sales reached nearly $356 billion, a year-on-year increase of 15.7%. This includes exports of over $180 billion and imports of over $190 billion. Particularly noteworthy is the trade surplus with the USA, which amounts to almost 50 billion US dollars.

Despite these positive figures, there are also challenges. Consumer prices rose 3.21% in the first five months, while the VND weakened by almost 2% against the US dollar. This poses additional inflation risks, particularly in construction materials and healthcare services.

Infrastructure and investments

To achieve its enormous growth targets, Vietnam needs significant infrastructure investments, such as high-speed trains and subways. The government plans to engage private companies and the population to mobilize resources to address these challenges. A transparent business environment and a stable legal system are according to reports from Vietnam crucial for economic growth.

Parallel to Vietnam's economic dynamism, developments are taking place on a global level that also influence the European economy. The ECB has initiated a new phase of its monetary policy strategy in 2024, which, after a tightening phase from July 2022 to September 2023, is now introducing a phase without interest rate steps. The inflation rate in the euro area is currently 2.4%, with inflation expectations lowered towards the medium-term target of 2% by 2025.

The ECB has cut interest rates by a total of 75 basis points over the course of 2024 and plans to continue to control the monetary policy stance through adjustments to the deposit facility interest rate. The Eurosystem's balance sheet total also fell.

In summary, Vietnam faces challenges characterized by a dynamic economy and significant growth targets. At the same time, European monetary policy is developing in an environment of moderated inflation risks and changing economic conditions.