Economy: IMF Executive Board concludes 2025 Article IV consultation with Vietnam
The International Monetary Fund Executive Board has concluded its 2025 Article IV consultation with Vietnam, noting strong recent growth alongside rising external and domestic risks, according to a press release on the institution’s website → view source.
Directors welcomed resilience in 2024 and early 2025 but cautioned that the outlook is clouded by new U.S. tariffs, global uncertainty, and structural challenges, the press release sayys.
Other key details include:
- Growth slowdown: The IMF projects growth will moderate to 6.5 percent in 2025 and 5.6 percent in 2026. The slowdown is linked to the full-year effect of new U.S. tariffs announced in July and the unwinding of fiscal stimulus that boosted activity in early 2025.
- External risks: The outlook remains highly dependent on trade negotiations. Escalating global trade tensions or tighter global financial conditions could weigh further on exports and investment, while capital outflows are a risk.
- Domestic risks: Corporate indebtedness and tighter domestic financial conditions could create renewed financial stress.
- Strategy: Executive Directors emphasised that fiscal policy has room to provide temporary, targeted support if growth slows markedly. In contrast, the space for monetary easing is limited given buoyant credit growth and inflationary pressures. They also called for more exchange rate flexibility to help absorb external shocks, and stressed the need to modernise Vietnam’s monetary policy framework.
- Structural reforms: The IMF urged improvements in public investment management, revenue mobilisation, and fiscal transparency to ensure debt sustainability as public investment expands. Strengthening financial sector resilience through higher liquidity and capital buffers, enhanced macroprudential tools, and stronger crisis-preparedness frameworks was also recommended. Additional calls were made to improve insolvency procedures, anti-money laundering standards, and regulation of crypto assets.
That is to say, Vietnam has emerged from 2024 with strong growth momentum, but the near-term outlook is softening under the combined weight of new tariffs, global uncertainty, and domestic vulnerabilities such as high corporate debt.
Areas for improvement highlighted by the IMF revolve around using fiscal tools for targeted support, restraining monetary easing, expanding exchange rate flexibility, and pushing forward with structural reforms in public investment, governance, and financial regulation.
This is in pursuit of an economy that maintains resilience in the face of external shocks and gradually diversifies its growth base.
Note that publication of IMF staff reports is voluntary and requires member country consent.
Vietnam has asked for more time to decide, with a final decision due within 28 days of the Board’s review.
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