Inflation projections are slightly below the previous estimates published in April this year, according to ADB’s flagship annual economic publication released on September 30.

A surge in exports ahead of the US tariff hikes and the government’s expansionary policies fuelled economic growth in the first half of 2025. However, growth is expected to slow for the rest of the year due to the impact of the reciprocal tariffs that took effect on August 7. While the domestic economy remains resilient, growth is expected to moderate from the strong performance in the first half of 2025.

“Better coordination between fiscal execution and monetary policies will help avoid overburdening monetary tools and preserve macro-financial stability,” said ADB country director for Vietnam, Shantanu Chakraborty. “In the long term, wide-ranging regulatory reforms must tackle structural challenges, like ensuring climate resilience, boosting private sector competitiveness, enhancing the efficiency of state-owned enterprises, tax modernisation, and digital transformation. This is vital for a more balanced growth model.”

US reciprocal tariffs on Vietnam – 20 per cent on imports and 40 per cent on transshipped goods – pose significant downside risks to near-term growth. For the remainder of the year, these tariffs are expected to weigh on trade and investment, underscoring the urgency of structural reforms to foster a more balanced growth model, supported by stronger domestic demand and more diversified export markets to cushion tariff-related shocks.

Inflation is projected to reach 3.9 per cent in 2025, while easing slightly to 3.8 per cent in 2026. The decline in global energy prices has helped lower transportation costs, which account for a significant share of the consumer price basket.

While maintaining a positive outlook for Vietnam in 2025-2026, the Asian Development Outlook September 2025 highlighted several risks stemming from both global uncertainties and domestic factors.

Should the global economic environment weaken more than anticipated, driven by slower growth among major trading partners and heightened financial market volatility, economic headwinds would intensify. Domestically, although public investment reforms have provided support, rising financial vulnerabilities and delays in policy implementation could constrain the effectiveness of stimulus measures.