Inflation held at 2.8% annually over 10 years as Vietnam upgrades to emerging market status.
Vietnam has successfully controlled inflation, balanced its budget, and ensured macroeconomic stability over the past decade. These achievements have created a solid foundation for sustained and robust GDP growth.
Key to macroeconomic stability
Over the past ten years, Vietnam has emerged as a rare bright spot in the region by maintaining low and stable inflation, averaging just 2.8% per year - significantly lower than many emerging economies. This success is attributed to the government’s flexible and well-coordinated fiscal, monetary, and pricing policies that helped preserve macroeconomic stability and created room for strong GDP expansion.
The consumer price index (CPI) for the first nine months of 2025 continues this trend.
Nguyen Thu Oanh, Director of the Service and Price Statistics Department under the General Statistics Office, said the average CPI rose 3.27% year-on-year - well within the target range set by the National Assembly.
According to Oanh, inflation has remained under control thanks to abundant domestic supplies of goods, particularly food and agricultural products, which make up a large portion of the CPI basket. Vietnam has not only met domestic demand but also maintained steady exports, keeping supply and demand balanced and limiting price fluctuations.
To proactively manage inflationary pressures, the government has employed coordinated fiscal and monetary measures, maintained adequate liquidity, adjusted interest rates flexibly, reduced input taxes and fees, and effectively implemented price stabilization policies.
While inflationary pressures are a constant challenge, the government has consistently taken proactive measures to keep prices from surging uncontrollably.
When global fuel prices soared, the government proposed a reduction in environmental protection taxes on fuel as early as July 11, 2022. This policy remains in effect and has significantly helped lower commodity prices, given that fuel is considered the "lifeblood" of the economy, affecting all sectors.
In addition, fiscal policy has been managed with flexibility and caution. The government has repeatedly proposed to the National Assembly reducing value-added tax (VAT) from 10% to 8% and deferred tax payments worth hundreds of trillions of VND for businesses and individuals during difficult periods. These measures have supported production without shocking the money supply.
Notably, despite offering tax breaks and fee reductions, the government has maintained healthy and sustainable public finances.
Over the past five years, the state budget revenue-to-GDP ratio reached about 18.3%, even as tax and fee reductions and deferrals amounted to approximately USD 45 billion. These policies supported businesses and individuals during the pandemic and recovery periods.
Investment spending rose from 28% to 32% of total state expenditure, while increased revenue and cost-saving measures contributed roughly USD 61 billion toward infrastructure development. This included highways, national defense and security, schools, hospitals, and efforts to eliminate substandard housing.
Administrative spending was cut significantly, and the restructuring of government agencies allowed around 17% of annual state spending to be allocated to social welfare.
Minister of Finance Nguyen Van Thang noted that financial and budget management has achieved comprehensive and outstanding results, meeting all 12 key targets set for the 2021–2025 period.
The average budget deficit from 2021–2025 is expected to be 3.1–3.2% of GDP, and public debt is projected at around 35–36% of GDP in 2025, which remains under control and supports national credit ratings.
According to the Ministry of Finance, capital markets continue to develop safely, sustainably, and with greater global integration. As of September 30, 2025, the bond market’s size reached USD 157 billion, equivalent to 32.8% of GDP, while stock market capitalization exceeded USD 377 billion, accounting for 78.4% of GDP.
In 2025, Vietnam met all the criteria to be upgraded from a frontier market to an emerging market, opening major opportunities to attract medium- and long-term capital from international investors to fund economic development.
Boosting public and business confidence
Speaking to VietNamNet, Dr. Nguyen Duc Do, Deputy Director of the Institute of Economics and Finance (Academy of Finance), said Vietnam has kept inflation below 4% over the past decade, averaging around 2.8% annually.
He emphasized that these results have been crucial in maintaining macroeconomic stability and increasing public and business confidence in the local currency, while also fostering a favorable business environment.
According to Dr. Do, the State Bank of Vietnam (SBV) has successfully controlled money supply and maintained credit growth at a moderate pace of around 14% per year, while ensuring positive real interest rates. These are fundamental factors in keeping inflation low.
Under government direction, the SBV has also guided credit institutions to stabilize deposit rates and reduce lending rates, thereby supporting businesses and individuals in expanding production and business activities.
After aggressively cutting policy rates in 2023, the SBV kept key interest rates unchanged in 2024 and 2025, allowing credit institutions to access low-cost funding to stimulate growth. Simultaneously, the SBV instructed banks to cut operating costs, accelerate digital transformation, and adopt various solutions to further reduce lending rates.
The SBV also issued direct instructions to credit institutions, urging them to stabilize deposit rates and lower lending rates, even suggesting that banks share part of their profits to help people and businesses access affordable credit.
As a result, interest rates continued to decline. By June 30, 2025, the average lending rate for new loans from commercial banks had dropped to about 6.9% per year, down 0.1 percentage points from the end of 2024. The average deposit rate was 4.0% per year, also down 0.1 percentage points.
Dr. Do concluded, “The key to controlling inflation and stabilizing the economy is to avoid excessive growth in money supply and credit, while maintaining positive real interest rates. Meeting these two conditions will likely ensure macroeconomic stability in the coming years.”