## tarea2026065

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---

### Project overview and delivery
- Project scope: 3-year TA (May 2023 – April 2026) financed by the government of Japan through the IMF Capacity Development Office in Thailand (CDOT).
- Objective: Build capacity in macroeconomic analysis and forecasting in the Ministry of Planning and Investment (MPI), which merged with the Ministry of Finance (MOF) in early 2025.
- TA delivery:
  - Nine in-person missions plus in-between-mission work.
  - TA delivered by staff of the IMF Institute for Capacity Development (ICD) and CDOT to support the Core Working Group (CWG).
  - TA team: Tubagus Feridhanusetyawan (Mission Chief, ICD); David Corvino (Macroeconomic Advisor, CDOT); Nuntanid Thongsri (Economist, CDOT).
  - Main counterparts: Financial and Monetary Department (FMD) of the MPI during 2023-24; Financial Institutions Department (FID) of the MOF during 2025-26.
- Role in policy process:
  - Supported CWG inputs to the 1317 policy working group established by Prime Minister’s decision No. 1317.
  - TA assisted analysis of policy impacts envisaged by the authorities but did not provide policy recommendations.

### CWG formation, restructuring, and outcomes
- CWG composition and functioning:
  - Multi-agency team including staff from MPI, MOF, State Bank of Vietnam (SBV), and MOIT.
  - CWG size remained broadly unchanged at around 25 effective members after merger.
  - CWG produced a user manual in English and Vietnamese and maintained an open filing system for tools, databases, user manuals, and presentations.
- Government restructuring impacts:
  - MPI merged with MOF (announced December 2024, approved February 2025, implemented starting March 2025).
  - Staff turnover: more than half of CWG members—mostly senior staff—left due to reassignments; many new members were junior, requiring extensive retraining.
  - Continuity measures: former MPI’s FMD merged into MOF’s FID; FID assigned new CWG members from MOF and SBV; authorities preserved the CWG.
- Institutional developments:
  - Macroeconomic Steering Committee chaired by the Prime Minister established in December 2025.
  - Macroeconomic Coordination Group chaired by the Ministry of Finance established in March 2026.
  - Linking CWG with the Macroeconomic Coordination Group recommended to ensure CWG outputs inform policymakers.

### Tools selected, customization, and documentation
- Tools chosen: Macroframework Foundations Tool (MFT) and Public Debt Dynamics Tool (DDT) developed by ICD General Macro-Fiscal Division (ICDMF).
- Selection criteria: forecasting needs, CWG absorptive capacity, data availability.
- Planned development stages:
  - Stage 1: standard versions of MFT and DDT during 2023–24.
  - Stage 2: extend tools during 2025–26 (after merger, priority shifted to operational capability rather than new features).
- Customization highlights:
  - Input database developed with Vietnam-specific calendar and formatting; bridging tables to convert to international presentation.
  - MFT behavioral equations and parameters calibrated to the Vietnamese economy.
  - Satellite tools developed for potential GDP estimation, trade-tension impact analysis, real effective exchange rates, and trading-partner variables.
  - Output formatting adjusted to authorities’ reporting needs.
- Documentation:
  - User manual drafted session-by-session (fifth to eighth missions), completed in December 2025 in Vietnamese and English.
  - Recommendation to assign a designated focal point to maintain and update the manual after each major data revision or model enhancement.

### Data, database, and quality procedures
- Data compilation:
  - By end-2023 (6 months after project start), CWG completed all input data up to 2022; a few latest-year series required estimation.
  - Fiscal sector data required extra work because MOF published data in a different format/classification; issues resolved.
  - CWG built an open database and filing system with sectoral directories (real, external, fiscal, monetary) and a global economic indicators database (WEO-based).
- Data quality recommendations:
  - Use officially published historical data; produce preliminary estimates where official data are unavailable and replace with final data when available.
  - Present MFT input data following international standards for macroeconomic statistics.
  - Perform consistency checks within and across sectors at every update; compare with IMF Article IV Consultation Staff Reports.
  - Maintain open database accessible to all CWG members and document approaches/methodologies.

### MFT structure and Vietnam-specific equation calibration
- MFT features:
  - Excel template with six worksheets; minimal input data (~60 variables).
  - Interlinks real, external, fiscal, and monetary sectors; produces short- to medium-term projections.
  - Recommended operating process: collecting input data, consistency checks, customizing behavioral equations, verifying policy/exogenous variables, solving the framework, analyzing results and scenarios.
- Vietnam-customized behavioral equations (specifications preserved verbatim):
  - Real Private Consumption:
    - Ct = 0.30 Ct−1 + 0.70 yd t −0.15(rr t − rr t−1)
    - ECT t = − 1/5 (Ct / Yt P −0.58) for outer projection years t+2 to t+5.
  - Real Private Investment:
    - It = 1.00 (yt − yt−1) + 1.00 yt p −0.50(rr t − rr t−1)
    - Error correction: guides investment toward long-run level of 30 percent of potential GDP with five-year adjustment horizon.
  - Real Exports (core):
    - xt = 0.90 xt−1 + 0.74 m t∗ −0.62 m t−1∗ −0.10 REER t
    - Supplementary (for comparison):
      - xt = 0.14 m t∗ + 0.57 (m t∗ − m t−1∗) −0.10 REER t + 3.90 kt stock −0.24
  - Real Imports (core):
    - mt = 1.41 yt + 0.31 REER t
    - Supplementary:
      - mt = 0.10 Ct + 0.96 xt + 0.10 REER t
  - Inflation:
    - pt = 0.81 pt−1 + 0.19 pt target + 0.08 ygap t + 0.30 (pt m − pt m,ss)
    - pt m = (1+π t∗ )(1+∆ER t ) −1
    - pt m,ss defined as a 5 year moving average (steady state).
- Interpretation notes:
  - Consumption driven more by income than real interest rates.
  - Investment strongly responds to activity and financing costs.
  - Exports dominated by external demand with modest REER elasticity.
  - Imports have income elasticity exceeding one reflecting import penetration.
  - Inflation largely backward-looking and driven by import prices.

### Potential GDP and trade-tension analysis
- Potential GDP estimation templates:
  - Statistical filtering: Hodrick-Prescott (HP) filter (two-sided) using historical data and medium-term GDP projections through 2030 to reduce end-point bias.
  - Structural production function: Cobb-Douglas decomposing potential output into capital, labor, human capital, and TFP.
  - Data sources: official Vietnamese authorities, IMF WEO, Penn World Table, United Nations population database, NSO.
  - Assumptions: actual capital stock reflects potential capital; potential labor via HP filter; human capital via linear trend; TFP smoothed with HP filter.
  - Recommendation: periodically review forward-looking assumptions.
- Trade-tension exercise (July 2025):
  - Assumed tariff increase → estimate decline in exports using demand elasticities and trade diversion → map export shock into domestic economy via Vietnam’s input-output table to trace sectoral spillovers and approximate GDP change.

### DDT integration and debt analysis
- DDT role:
  - Excel-based debt projections and stress tests using MFT outputs (growth, inflation, fiscal balances, interest rates, exchange rates).
  - Outputs: debt projections, fiscal adjustment paths, standardized accounting-based debt dynamics.
- Procedure and findings:
  - Transfer MFT outputs to DDT standardized input sheet; verify baseline consistency before scenarios.
  - Conduct standalone stress tests and fan charts with shock and volatility assumptions.
  - DDT revealed Vietnam’s debt projection is sensitive to changes in the primary fiscal balance, highlighting the importance of prudent fiscal policy.

### Projection cycle, scenarios, analysis, and presentation
- Scenario design:
  - Baseline: incorporates macroeconomic policies to be implemented; most likely medium-term outcome.
  - Alternatives: deviations such as larger fiscal spending or external shocks (global oil/food prices).
  - Fiscal options in MFT:
    1) unitary tax elasticity with respect to GDP (unchanged tax/GDP ratio),
    2) full-employment tax ratio adjusted by output gap.
  - Monetary assumptions: interest rate aligned with central bank policy in near term and converging to rate consistent with inflation target; exchange rate determined by policy or inflation differentials/assumed REER changes.
- Post-run analysis and sensitivity testing:
  - Checks: deviations from recent trends; consistency of fiscal and monetary policy effects; convergence toward steady state.
  - Indicators to compare: GDP, inflation, current account balance, FX reserves, fiscal balance, public debt, broad money, credit growth.
  - Sensitivity examples: change government spending by 1 percent of GDP; change policy interest rate or exchange rate by 1 percentage point.
  - Compare CWG results with authorities’ official documents and IMF WEO.
- Presentation practice and institutionalization:
  - Presentations should introduce CWG, describe MFT/DDT methodology, discuss recent developments, clarify assumptions, present multiple scenarios, and summarize policy implications.
  - CWG presented to the 1317 policy working group (March 2024, October 2024) and to MOF management post-restructuring; presentations were well received.
  - Prior practice: quarterly projections aligned with 1317 calendar (June and September updates informed next-year policy formulation).
  - Recommendation: establish a mechanism to channel CWG outputs into MOF and Macroeconomic Coordination Group and a clear projection cycle.

### TA recommendations (selected, preserved wording and timing)
- Supporting the team:
  - Preserve the multi-agency structure of the CWG.
  - Clarify CWG roles and responsibilities within the MOF.
  - Assign CWG coordinators to manage workflows and projection cycles.
  - Establish internal training.
  - Prioritize staff with backgrounds in macroeconomic analysis or from policy departments when assigning new CWG members.
- Operating the projection tools:
  - Establish a clear projection cycle in the MOF.
  - Meet regularly to maintain internal coordination.
  - Update input database and policy assumptions based on the projection calendar.
  - Perform ex-post evaluation of projection results.
  - Maintain the centralized database following international standards for macroeconomic statistics, open filing system, and user manual.
  - Ensure consistency of historical data and analyze realism and consistency of projection results.
- Presenting projection results in policy discussions:
  - Establish a mechanism for the CWG to channel outputs to inform policy discussions in the MOF and the Macroeconomic Coordination Group.
  - Continue writing reports and making presentations in policy discussions in the MOF.
  - MOF management should continue requesting macroeconomic analysis from the CWG to sustain capacity building efforts.
- Priority actions and timelines (as recommended):
  - Clarify CWG’s status, roles, responsibilities in MOF, including expected deliverables (MOF management; May/June 2026).
  - Continue assigning CWG coordinators and prioritize staff with macroeconomic background for new members (CWG; August 2026).
  - Establish a clear projection cycle in MOF aligned with government calendar (CWG and MOF management; August/September 2026).
  - Schedule internal coordination meetings and perform ex-post evaluation at end of projection cycle (CWG; September 2026).
  - Preserve CWG as multi-agency team and minimize staff turnover (MOF management; Continued).
  - Establish mechanism to channel CWG output into MOF and Macroeconomic Coordination Group (MOF management).

### Implementation milestones and assessments
- Key mission milestones (selected):
  - Mission 1 — June-July 2023: Scoping, action plan, refresher macro framework training, CWG formation.
  - Mission 2 — October 2023: Compile macroeconomic database and customization; one-week FPP training.
  - Mission 3 — March 2024 and Mission 4 — June 2024: Customize MFT, produce initial and full projections, present to policymakers.
  - Mission 5 — October 2024: Introduce DDT, produce macro and debt projections, present to 1317 policy group.
  - Mission 6 — March 2025 and Mission 7 — July 2025: Rebuild CWG after restructuring, train new members.
  - Mission 8 — December 2025 and Mission 9 — March 2026: Sustain capacity, finalize user manual, ensure independent operation.
- Logical Framework outcomes and ratings (selected):
  - Outcome: Baseline understanding of forecasting capabilities — Annual Assessment Rating: 4 Fully Achieved; Outcome Rating Date: 5/9/2024.
  - Outcome: Improved analytical skills and forecasting capacity — Annual Assessment Rating: 4 Fully Achieved; Outcome Rating Date: 3/18/2026.
    - Current Assessment Value: All CWG staff have taken IMF FPP/MFT/DDT training in July 2025 as of 1/28/2026.
    - Current Assessment Value: The CWG started making projections using MFT in March 2024 as of 1/28/2026.
    - Current Assessment Value: More than 10 CWG members could operate the MFT in June 2024 as of 1/28/2026.
  - Outcome: Analytical models and forecasting tools operational — Annual Assessment Rating: 4 Fully Achieved; Outcome Rating Date: 12/19/2025.
    - Current Assessment Value: The CWG has developed Macro-Foundation Tool (MFT) and started operating it in March 2024 as of 1/28/2026.
    - Current Assessment Value: The CWG completed the user manual in December 2025 as of 1/28/2026.
  - Outcome: Decisionmakers use MPT-based analysis — Annual Assessment Rating: 4 Fully Achieved; Outcome Rating Date: 3/18/2026.
    - Current Assessment Value: The CWG started participating in the quarterly meeting of the 1317 inter-ministerial policy working group in March 2024 as of 1/28/2026.

### Lessons learned, risks, and authorities’ view
- Lessons learned:
  - Strong senior management engagement and multi-ministry staff inclusion improved ownership and data coordination.
  - Assigning staff with macroeconomic backgrounds accelerated progress; user manual and large CWG membership mitigated turnover risks.
  - Sub-group coordinators (input, analytical, policy) were important to manage projection workflows.
  - Preparatory consistency checks and post-run reviews are critical for credible projections.
- Risks and mitigations:
  - Main risks: staff resource constraints/turnover, insufficient inter-agency coordination, lack of engagement, integration into policy formulation.
  - Mitigations: large CWG membership, completed user manual, inclusion of staff from MPI, MOF, SBV, MOIT, interpretation and refresher training.
  - Integration into policy formulation remained a moderate risk after MOF reorganization; priority to create mechanisms to channel CWG output into MOF policy discussions.
- Authorities’ view:
  - Broad agreement with assessment and recommendations; TA achievements considered remarkable despite turnover.
  - Authorities requested further TA support and assigned National Institute for Economic and Finance (NIEF) to implement new TA program.
  - Suggested future TA focus: integrating forecasting tools into policy processes, expanding policy analysis (public investment, specific tax/expenditure policies), refining monetary policy transmission (including credit channel).
  - Emphasized that data used as inputs are officially published and comply with state secret protection regulations.

*IMF Technical Assistance Report (May 2023 – April 2026).*

### PREFACE ................................................................................................................

### PREFACE

### Project overview
- The TA project built capacity in macroeconomic analysis and forecasting within the Ministry of Planning and Investment (MPI), which merged with the Ministry of Finance (MOF) in early 2025 as part of broader government restructuring.
- The project covered a 3-year period: May 2023 – April 2026.
- The project was financed by the government of Japan through the IMF Capacity Development Office in Thailand (CDOT).
- The TA was delivered by staff of the IMF Institute for Capacity Development (ICD) and CDOT to support the authorities’ Core Working Group (CWG) in developing and operating macroeconomic projection tools and presenting projection results in government policy discussions.

### Implementation and delivery
- TA activities were implemented through nine in-person missions and in-between-mission work.
- Focus areas included: supporting analytical team, building projection tools, and presenting projection results in policy discussions.
- The TA team helped the CWG analyze the impact of macroeconomic policies envisaged by the authorities, but it did not provide policy recommendations because policy discussions between the authorities and the IMF are conducted in the context of surveillance.
- The TA mission presented this report to senior management of the MOF and CWG during the final mission of the TA project in March 2026 for their input and comment.

### TA team and main counterparts
- TA team members:
  - Tubagus Feridhanusetyawan (Mission Chief, ICD)
  - David Corvino (Macroeconomic Advisor, CDOT)
  - Nuntanid Thongsri (Economist, CDOT)
- Main counterparts:
  - Financial and Monetary Department (FMD) of the MPI during 2023-24
  - Financial Institutions Department (FID) of the MOF during 2025-26
- Coordination and support from IMF and CDOT:
  - Ms. Eteri Kvintradze (CDOT Director)
  - Mr. Paulo Medas and Mr. Martin Sommer (IMF Vietnam Mission Chiefs)
  - APD Vietnam team
  - Mr. Jochen Schmittman (IMF Resident Representative (RR)), Ms. Nguyen Van Anh, Ms. Nga Ha, Ms. Hoang Hai (IMF RR Office in Vietnam)
  - Interpretation support from interpreters
  - Administrative support from Mr. Supphakon Damrongkitkanwong (CDOT) and Mr. Von Allena (ICD)
  - Close coordination with other IMF TA Teams, including the Fiscal Affairs Department (FAD) and the ICD Macro-Modeling and Monetary (ICDMM) Division

### Scope, limitations, and institutional context
- The report is based on the implementation of the TA project during May 2023 – April 2026.
- Findings and recommendations represent the views and advice of the IMF TA team and do not necessarily reflect those of the authorities.
- The TA team maintained engagement through a period of major government restructuring, with Vice Minister-level and Director General-level support noted as instrumental in sustaining TA implementation.
- The TA team expressed appreciation for continued support from Vice Minister Tran Quoc Phuong (MPI and MOF), Vice Minister Nguyen Duc Chi (MOF), Mr. Nguyen The Ngan (Director General, MPI), Ms. Hoang Thi Hong (Deputy DG, MPI and MOF), and Mr. Vu Duc Hoi (DG, MOF), and for logistical support from Ms. Nguyen Thi Minh Thoa (MPI and MOF) and Ms. Bui Thi Kim Ngan (MPI and MOF).

### Key acronyms and abbreviations used in the report
- APD, BOP, CD, CDOT, CIEM, CWG, DDTPublic Debt Dynamics Tool, FAD, FID, FMD, FPAS, FPP, GFSGovernment Finance Statistics, GSO, ICD, ICDMF, ICDMM, IMF, MFTMacroframework Foundations Tool, MOF, MOIT, MPD, MPI, MPTMacroeconomic Projection Tool, NIEF, NSO, SBD, SBV, SEDP, TA, TFPTotal Factor Productivity, VIDS, WEOWorld Economic Outlook

*Preface — IMF Technical Assistance Report (May 2023 – April 2026).*

### Executive Summary

### Executive Summary

### Team: Supporting the CWG
- Project scope: 3-year TA (May 2023 – April 2026) financed by the government of Japan through the IMF Capacity Development Office in Thailand (CDOT).
- Objective: Build capacity in macroeconomic analysis and forecasting in the Ministry of Planning and Investment (MPI) that merged with the Ministry of Finance (MOF) in early 2025.
- CWG composition: multi-agency team including staff from MPI, MOF, State Bank of Vietnam (SBV) and the Ministry of Trade and Investment (MOIT).
- Supervision: Financial and Monetary Department (FMD) of the MPI during 2023-24; Financial Institutions Department (FID) of the MOF during 2025-26.
- TA team: staff from the IMF Institute for Capacity Development (ICD) Department and CDOT.
- Delivery: nine in-person missions plus in-between-mission work.
- Role in policy process:
  - Supported CWG inputs to the 1317 policy working group established by Prime Minister’s decision No. 1317.
  - CWG asked to provide regular updates and inputs to the MPI Vice Minister, contributing to rapid TA implementation.
  - After merger to MOF in early 2025, MOF management preserved the CWG and confirmed continuity of the TA project.

### Tool: Building Macroeconomic Projection Tools
- Tools selected: Macroframework Foundations Tool (MFT) and Public Debt Dynamics Tool (DDT), developed and published by the ICD General Macro-Fiscal Division (ICDMF).
- Selection criteria: authorities’ forecasting needs, CWG absorptive capacity, data availability.
- Timeline and milestones:
  - By second mission in October 2023: CWG could compile input data.
  - By third mission in March 2024: CWG could calibrate MFT equations and generate initial projections.
  - Fourth mission in June 2024: focused on developing projection scenarios and analyzing results.
  - Fifth mission in October 2024: CWG produced complete macroeconomic and debt projections and presented results to policymakers.
- Supplementary analysis supported by TA: estimation of potential GDP and analysis of the impact of global trade tensions.
- Institutional and documentation achievements:
  - First comprehensive multi-sector macroeconomic framework for forecasting in Vietnam.
  - Multi-ministry staff involvement improved inter-ministry coordination and capacity development.
  - CWG produced a user manual in both English and Vietnamese.
  - Maintained an open filing system where tools, databases, user manuals, and presentations were available to all involved ministries.

### Policy: Presenting Projection Results in Policy Discussions
- Outputs: macroeconomic and debt projections under baseline and alternative scenarios incorporating external shocks or policy changes.
- Communication: clear and well-structured report and presentation prepared by the CWG to inform policymakers.
- Engagement:
  - CWG presented macroeconomic analysis and projections to the 1317 policy working group chaired by the MPI Vice Minister.
  - MPI Vice Minister and the 1317 policy group welcomed the CWG’s presentation and highlighted the quality of analysis.
- TA role: assisted analysis of policy impacts envisaged by authorities but did not provide policy recommendations.
- Expected benefits: regular CWG presentations support authorities in policy formulation and strengthen policy dialogue with the IMF in the context of surveillance.

### Rebuilding the CWG after Government Restructuring
- Institutional change: MPI merged with MOF in early 2025 as part of cabinet restructuring (announced December 2024, approved February 2025, implemented starting March 2025).
- Staff turnover: more than half of CWG members—mostly senior staff—left the team due to job reassignments.
- Continuity measures:
  - Former MPI’s FMD merged into MOF’s FID; FID continued full support by assigning new CWG members from MOF and SBV.
  - Authorities preserved the CWG; the CWG size remained broadly unchanged at around 25 effective members.
- Challenges: many new members were junior with limited economic background, requiring extensive refresher training.
- Refocused 2025 TA priorities: rebuilding the CWG and bringing new members up to speed on MFT and DDT; concentrate on strengthening internal coordination and preparing presentations.
- Achievements: objectives of rebuilding and training new members were achieved by early 2026.
- Institutional opportunity: Government established the Macroeconomic Steering Committee chaired by the Prime Minister in December 2025 and the Macroeconomic Coordination Group chaired by the Ministry of Finance in March 2026; linking the CWG with the Macroeconomic Coordination Group is important to ensure CWG outputs inform policymakers.

### TA Recommendations
- Supporting the team:
  - Preserve the multi-agency structure of the CWG.
  - Clarify CWG roles and responsibilities within the MOF.
  - Assign CWG coordinators to manage workflows and projection cycles.
  - Establish internal training.
  - Prioritize staff with backgrounds in macroeconomic analysis or from policy departments when assigning new CWG members.
- Operating the projection tools:
  - Establish a clear projection cycle in the MOF.
  - Meet regularly to maintain internal coordination.
  - Update input database and policy assumptions based on the projection calendar.
  - Perform ex-post evaluation of projection results.
  - Maintain the centralized database following international standards for macroeconomic statistics, open filing system, and user manual.
  - Ensure consistency of historical data and analyze realism and consistency of projection results.
- Presenting projection results in policy discussions:
  - Establish a mechanism for the CWG to channel outputs to inform policy discussions in the MOF and the Macroeconomic Coordination Group.
  - Continue writing reports and making presentations in policy discussions in the MOF.
  - MOF management should continue requesting macroeconomic analysis from the CWG to sustain capacity building efforts.

*IMF Technical Assistance Report | Executive Summary*

### Annex IV). The DDT is an Excel-based tool that can produce debt projections and stress tests based on

### tarea2026065 - Annex IV). The DDT is an Excel-based tool that can produce debt projections and stress tests based on

### Selection and implementation plan for MFT and DDT
- The selection of MFT and DDT was driven by:
  - Meeting the authorities’ forecasting needs.
  - Matching the absorptive capacity of the newly established CWG.
  - Availability of data.
- Planned two-stage development:
  - Stage 1: using the standard versions of MFT and DDT during 2023–24.
  - Stage 2: extending the tools to incorporate more features during 2025–26.
- Rationale for step-by-step approach:
  - Help the CWG develop coordinating mechanisms and data sharing across agencies.
  - Reap synergies with analytical tools used by various agencies.
- After government restructuring, TA priorities were refocused on ensuring CWG operational capability with the tools already developed rather than further feature enhancements.

### Customization of MFT and DDT for Vietnam
- The CWG, supported by the TA team, developed and customized the MFT and DDT to fit the Vietnamese economy.
- Specific tailoring actions:
  - The Input database was developed based on Vietnam’s data, including a specific calendar and formatting for easy updating and consistency checks. Bridging tables were created to convert data from the Vietnam-specific format to the standard international presentation for economic statistics. 11
  - The MFT’s behavioral equations and parameters for forecasting were calibrated and tailored to reflect the Vietnamese economy.
  - Separate satellite tools were developed for:
    - Estimation of potential GDP.
    - Analysis of the impact of trade tensions.
    - Calculation of real effective exchange rates.
    - Derivation of variables related to Vietnam’s trading partners.
  - Policy assumptions for generating projections were formulated based on concrete policies envisaged by the authorities.
  - Output formatting (selected indicators, sectoral tables, and charts) was adjusted to fit the authorities’ needs and reporting requirements.
- Note: The MFT and DDT are publicly available on the IMF website. See Feridhanusetyawan at. al. (2025), Acosta Ormaechea, at. al. (2021, 2025).

### Building the input database and filing system — objectives and recommendations
- Main objective:
  - Ensure the quality and consistency of historical data across sectors to assess recent macroeconomic developments and provide a solid foundation for generating projections.
- Data environment observations:
  - Vietnam’s macroeconomic data were generally available, but data management was spread over various agencies.
  - Some data were published with long lags and subject to frequent revisions.
- TA mission recommendations for the CWG:
  - Use historical data published by relevant government institutions; if some data are not yet available, the CWG should produce its own preliminary estimates to ensure completeness of the MFT’s data input (i.e., no missing values). Preliminary estimates should be refined and replaced with final data when available. Inclusion of staff from various ministries facilitates internal discussions in producing estimates.
  - Present the MFT’s input data following the international standards of definition and presentation for macroeconomic statistics to ensure correct incorporation into the MFT template and produce internationally comparable macroeconomic indicators.
  - Perform data checks within and across sectors at every data update. Simple consistency checks include ensuring numbers/tables add up and that headline indicators (economic growth, inflation, exports, imports, fiscal indicators) are consistent with publicly available data from different sources. Comparing historical data with those published in the IMF Article IV Consultation Staff Reports is useful for checking accuracy and consistency across sectors.
  - Maintain an open database and filing system accessible to all CWG members from different ministries to promote transparency, accountability, and resolution of data inconsistencies. Approaches and methodologies for producing estimates should be discussed openly among CWG members.

### Implementation progress
- The CWG made good progress in compiling data from different sources and building complete Vietnam data.
- Data availability:
  - National accounts and prices data were readily available.
  - The CWG was able to assemble complete data for the real sector during the scoping mission in June-July.

*IMF Technical Assistance Report | Annex IV excerpt*

### 2023. By the second mission in October 2023, the CWG managed to compile all input data for the

### tarea2026065 - 2023. By the second mission in October 2023, the CWG managed to compile all input data for the

### Data compilation and open database
- By end-2023 (6 months after the TA project started), the CWG was able to complete all input data up to 2022.
- A few data series from the latest year were unavailable and required estimation.
- Fiscal sector data required additional time because MOF published data in a different format and classification from those required by the MFT; format and classification issues were resolved.
- The CWG ensured input data used for projection tools were officially published by relevant ministries and agencies in compliance with data regulations.
- The CWG developed a database for global economic indicators and trading partners mostly from the WEO database and created a special template to download and convert these data into the MFT standard template. Trading partners’ data include prices, exchange rates, economic growth, bilateral trade flows.
- The CWG built an open database and filing system accessible to all CWG members, storing input files in sectoral directories (real, external, fiscal, and monetary) including the process for generating MFT inputs to promote transparency and ease cross-ministry sharing.

### Customizing MFT equations
- The TA team and CWG formulated MFT equations based on economic theory and Vietnamese-specific characteristics, prioritizing calibration over econometric estimation due to limited historical data and structural breaks.
- Regression analysis was used only as a supporting tool for comparison.
- Coefficients were calibrated iteratively to generate plausible dynamics and stable long-run behavior with coherent block interactions.
- Constraints and error correction mechanisms were imposed on selected equations and coefficients to:
  - Prevent counterintuitive responses,
  - Avoid unstable dynamics,
  - Anchor key macroeconomic ratios to reasonable long-run levels,
  - Guide variables toward long-run paths and improve robustness of medium-term projections.
- Recommendation: continue strengthening internal documentation of economic rationale behind calibrated parameters and constraints; be cautious when adding endogenous explanatory variables due to additional iterations required to solve the framework; preserve structural integrity, adherence to economic principles, and simplicity.

### Complementary analysis: potential GDP and trade-tension exercise
- Estimating potential GDP:
  - The MFT requires an exogenous assumption of potential GDP.
  - The TA team helped develop templates using:
    - A statistical filtering approach: Hodrick-Prescott (HP) filter (two-sided, using historical data and medium-term GDP projections through 2030 to reduce end-point bias).
    - A structural production function methodology: Cobb-Douglas specification decomposing potential output into capital, labor, human capital, and TFP.
  - Data sources: official Vietnamese authorities, IMF WEO, Penn World Table, United Nations population database, NSO.
  - Assumptions and methods:
    - Actual capital stock assumed to reflect potential capital.
    - Potential labor input derived by applying HP filter to remove cyclical fluctuations consistent with natural rate of unemployment.
    - Human capital approximated using a linear trend.
    - TFP smoothed using HP filter.
    - Medium-term values of key variables (GDP, employment, capital stock) assumed and incorporated to mitigate HP end-point bias.
  - Recommendation: periodically review forward-looking assumptions to maintain consistency with macro framework and structural changes.
- Analyzing impact of trade tensions:
  - In July 2025, the mission assisted CWG to analyze impact of global trade tensions.
  - Method: assumed tariff increase → estimated decline in exports using demand elasticities and trade diversion → mapped export shock into domestic economy via Vietnam’s input-output table to trace sectoral spillovers and approximate associated GDP change.

### Formulating assumptions on policies and exogenous variables
- Baseline scenario: incorporates macroeconomic policies to be implemented and reflects the most likely medium-term outcome.
- Alternative scenarios: reflect deviations (e.g., larger fiscal spending, external shocks such as global oil or food price changes).
- Recommended preparatory step: preliminary discussions with policymakers (MPI or MOF management) to translate government intentions into MFT and DDT policy variables.
- Fiscal policy assumptions:
  - Revenue options in MFT:
    1) unitary tax elasticity with respect to GDP (unchanged tax/GDP ratio),
    2) full-employment tax ratio adjusted by output gap to capture procyclicality.
  - Nontax revenue and grants set exogenously; grants based on BOP assumptions.
  - Spending: growth of noninterest expenses and acquisition of nonfinancial assets set according to government policies.
  - Financing: external fiscal financing set exogenously; domestic financing left as residual.
- Monetary policy assumptions:
  - Main instruments: interest rate and exchange rate.
  - Interest rate: set in line with central bank’s policy rate in near term and converge to rate consistent with inflation target over long term.
  - Exchange rate: can be determined by authorities’ policies, or assumed based on inflation differentials with trading partners or assumed rate of real exchange rate depreciation/appreciation.
- Exogenous variables:
  - Export/import projections taken from GDP component projections; government flows from fiscal projection.
  - Other components (primary and secondary incomes, FDI, private capital flows) projected exogenously.
  - Projections for external environment and trading partners taken from IMF WEO.
- Steps to formulate baseline scenario:
  1) Specify MFT equations and coefficients to reflect Vietnamese economy and ensure convergence to steady-state,
  2) Set consistent exogenous variable assumptions that converge to stable paths,
  3) Reflect authorities’ actual or likely policy variables.
- Alternative scenarios: change fiscal/monetary assumptions or external shock assumptions (global rates, oil prices, other exogenous factors).

### Analyzing projection results and sensitivity testing
- Post-run analysis focuses on realism of projections and development of narrative.
- Checks recommended by TA team:
  - Whether projection deviates significantly from recent trends,
  - Whether fiscal and monetary policy effects are consistent with expectations,
  - Whether projections converge toward steady state (e.g., narrowing output gap).
- Indicators to analyze across sectors: GDP, inflation, current account balance, FX reserves, fiscal balance, public debt, broad money, credit growth for internal consistency and medium-term convergence.
- Sensitivity analysis: verify framework responses; examples include changing government spending by 1 percent of GDP, changing policy interest rate or exchange rate by 1 percentage point.
- Compare CWG results with authorities’ official documents and IMF WEO to gauge realism and explain differences.

### Using DDT for debt analysis and projection
- DDT integrated as downstream projection tool using MFT outputs (growth, inflation, fiscal balances, interest rates, exchange rates).
- DDT outputs: debt projections, fiscal adjustment paths, standardized outputs based on accounting-based debt dynamics framework.
- Procedure:
  - Ensure MFT outputs transferred to standardized DDT input sheet,
  - Verify baseline debt projection consistency between MFT and DDT before scenario analysis,
  - Conduct stress tests and fan charts in standalone DDT template with additional shock and volatility assumptions.
- Findings: DDT revealed Vietnam’s debt projection is sensitive to changes in the primary fiscal balance, highlighting the importance of prudent fiscal policy.

### Writing and maintaining the user manual
- User manual prepared through collaboration between CWG and TA team, drafted session-by-session from the fifth to eighth missions.
- Manual covers building the database, customizing tool to Vietnamese economy, calibration of MFT equations, potential GDP estimation, and tool operation.
- Manual produced in Vietnamese and English to support day-to-day operation and external communication.
- Recommendation: assign a designated focal point to maintain and update the manual after each major data revision or model enhancement.

### TA recommendations and implementation (tool development and operations)
- Tools developed: MFT and DDT customized to Vietnam.
- Maintain shared filing system for CWG cross-institutional access.
- Develop and maintain comprehensive centralized macroeconomic database using official domestic sources, trading partners, and WEO; CWG produced estimates where necessary.
- Ensure historical data consistency before projections.
- Calibrate MFT equations and assumptions based on economic theory and Vietnamese characteristics.
- Perform ex post evaluations and refine projections as needed.
- Completed user manual in English and Vietnamese.

### Presenting projection results in policy discussions
- Incorporating government policies:
  - Distinguish between performance targets and policies to achieve them;
  - Clarify baseline versus alternative policy classification;
  - Classify policies into macroeconomic and other (structural/sectoral) policies;
  - For macro policies, focus on monetary and fiscal measures and translate into MFT variables;
  - Capture non-macro policies via exogenous variable assumptions (e.g., investment deregulation → higher FDI assumptions).
- Preparing presentations:
  - Introduce CWG composition, roles, and work program;
  - Describe MFT and DDT methodology and emphasize openness/accessibility;
  - Discuss recent economic developments (year before projection start);
  - Clarify assumptions on global indicators and trading partners;
  - Present multiple scenarios (baseline and alternatives);
  - Summarize policy implications at the end.
- Presentation experience and institutional interaction:
  - Third TA mission in March 2024: CWG presented status, tools, recent developments up to 2023, projections for 2024–2025, and two scenarios (baseline; alternatives with increased fiscal spending and more relaxed monetary stance). Outcomes consistent with expectations: accommodative policies raise GDP growth, inflation, fiscal deficit, public debt, and lower current account and FX reserves.
  - Fifth mission in October 2024: CWG presented at 1317 policy group meeting; developed baseline where real GDP growth improved during 2024–2025 and converged toward potential GDP; updated DDT and showed impacts of shocks; alternative accommodative policies raised real GDP growth and inflation beyond target.
  - Post-restructuring (early 2025): CWG moved to MOF, experienced staff turnover; TA refocused on retraining and rebuilding CWG; CWG presentations in 2025–26 focused on realism and macro implications of growth scenarios and were well received by MOF management.
- Institutionalization:
  - Prior practice: quarterly projections aligned with 1317 policy working group calendar; June and September updates informed next-year policy formulation.
  - After merger and restructuring, mechanisms for presenting CWG output needed reestablishment under MOF.
- TA recommendations (policy presentation):
  - Establish concrete mechanism to present CWG output in policymaking process,
  - Establish forecasting calendar and projection cycle,
  - Translate government policies into MFT/DDT measures and discuss policy scenarios with management in advance,
  - Prepare reports and presentations including CWG introduction, tools, assumptions, scenarios, and policy implications,
  - Obtain post-presentation feedback.

### Lessons learned, risks, and moving forward
- Lessons learned:
  - Strong senior management engagement increased CWG motivation and TA ownership.
  - Inclusion of staff from various ministries resolved fragmented data issues and strengthened coordination.
  - Assigning staff with strong macroeconomic backgrounds aided rapid progress; staff turnover after restructuring necessitated retraining.
  - Clear CWG roles and responsibilities improved coordination and accountability; ministerial decisions clarified status and expectations.
  - Sub-group coordinators (input, analytical, policy) were important to manage projection workflows.
  - Minimizing staff turnover is essential; the user manual and large CWG membership (senior and junior staff) mitigated turnover risks.
  - Converting MFT outputs to MOF formats facilitates policy discussions.
  - Preparatory consistency checks and post-run reviews are critical for credible projections.
- Risks and mitigation:
  - Main risks identified in June-July 2023 scoping: staff resource constraints/turnover, insufficient inter-agency coordination, lack of engagement, integration into policy formulation.
  - Mitigations: establish CWG with large membership, complete user manual, include staff from MPI, MOF, SBV, MOIT, provide simultaneous interpretation and refresher training during missions.
  - Integration into policy formulation remained moderate risk due to MOF reorganization; priority is to create mechanisms to channel CWG output into MOF policy discussions.
- Moving forward (priority actions and timelines as recommended):
  - Preserve CWG as multi-agency team and minimize staff turnover (MOF management; Continued).
  - Clarify CWG’s status, roles, responsibilities in MOF, including expected deliverables (MOF management; May/June 2026).
  - Continue assigning CWG coordinators to manage work and maintain interactions with MOF management (CWG and MOF management; May/June 2026).
  - Prioritize staff with macroeconomic analysis background for new CWG members and establish training program (CWG; August 2026).
  - Establish a clear projection cycle in MOF aligned with government calendar (CWG and MOF management; August/September 2026).
  - Schedule internal coordination meetings to strengthen collaboration and update projections (CWG; August/September 2026).
  - Perform ex-post evaluation of projections at end of projection cycle to assess forecast performance (CWG; September 2026).
  - Continue assigning CWG to write reports and present to MOF management and Macroeconomic Coordination Group; timeline depends on new arrangement establishment.
  - Establish mechanism to channel CWG output into MOF and Macroeconomic Coordination Group (MOF management).

### Authorities’ view
- Authorities broadly agreed with assessment and recommendations and considered TA achievements remarkable despite staff turnover.
- Authorities emphasized need to clarify CWG positions, roles, responsibilities within MOF and avoid fixed deadlines while institutional arrangements are prepared.
- Authorities requested further TA support and assigned National Institute for Economic and Finance (NIEF) to implement new TA program.
- Authorities suggested future TA focus on integration of forecasting tools into policy processes, expanding policy analysis coverage (public investment policy, specific tax/expenditure policies), refining monetary policy transmission representation (including credit channel).
- Authorities valued the user manual and reiterated that data used as inputs are officially published and comply with state secret protection regulations.

*IMF Technical Assistance Report — content from the supplied document.*

### Annex I. Technical Assistance (TA) Delivery Schedule

### Annex I. Technical Assistance (TA) Delivery Schedule

### Project delivery phases and mission outputs
- Phase 1.1. Scoping, Project Action Plan, and Training (Mission 1 — June-July 2023)
  - Assessing the current policy analysis and forecasting systems.
  - Reaching agreement ad-referendum on TA action plan.
  - Making presentation, workshop, refresher training on macroeconomic framework.
  - Discussing the Core Working Group (CWG): status, role, and coordination.
  - In-between mission work:
    - Completing the formation of CWG, including its roles, responsibilities, and tasks.
    - Collecting and compiling local data for main accounts and other essential data.
    - CWG taking in-person or online FPP/MDS training depending on knowledge gaps.

- Phase 1.2. Completing Data Inputs (Mission 2 — October 2023)
  - Compiling macroeconomic database and customization of input sheets.
  - Checking data consistency, identifying issues and solutions.
  - Conducting one-week training on FPP using simplified modules to ensure that all CWG members are familiar with the Fund macroeconomic framework.
  - In-between mission work:
    - CWG members continue taking FPP/MDS training as needed.
    - Customizing input data and sector output tables. Continue resolving data issues.

- Phase 1.3. Producing Macroeconomic Projection using MFT (Mission 3 — March 2024; Mission 4 — June 2024)
  - Mission 3 outputs:
    - Finalizing data inputs including checking for consistency and resolving data issues.
    - Customizing the MFT, estimating and testing the behavioral equations.
    - Formulating assumptions on monetary and fiscal policy for making projections.
    - Practice operating the MFT and tracing interlinkages across all sectors.
    - Start operating MFT to produce initial projections.
    - Presenting the preliminary results to policy makers.
  - Mission 3 in-between work:
    - Updating data input to incorporate the latest estimates of the 2023 outturn.
    - Continue improving the behavioral equations.
    - Formulating policy assumptions based on real policies envisaged by the authorities.
    - Preparing the groundwork for contributing to the policy making process.
    - Start developing user manuals and associated material.
  - Mission 4 outputs:
    - Producing full-scale projections under the baseline and alternative policy scenarios.
    - Analyze the basic properties displayed by the model and interpret the results.
    - Assessing realism and the adjustments needed and identifying the differences.
    - Testing for glitches and errors in producing projections.
    - Developing a standard format for presentation to policy makers on a regular basis.
    - Presenting the projection results to policy makers and seeking their feedback.
    - Updating user manual and associated material.
  - Mission 4 in-between work:
    - Starting the groundwork for incorporating a debt module based on the DDT.
    - Continue testing for errors, cleaning of tool to incorporate all changes to date.
    - Continue updating the user manual and associated material.

- Phase 1.4. Introducing Debt Analysis and Presenting Projection Results in Policy Discussions (Mission 5 — October 2024)
  - Refresher training on debt projection using DDT.
  - Producing macroeconomic projections using MFT to be used as inputs for DDT.
  - Start operating the DDT to make debt analysis and projection and analyze the results.
  - Producing macroeconomic and debt projections using MFT and DDT.
  - Presenting the projections in the quarterly meeting of the 1317 policy working group.
  - Discussing options for extending the tools.
  - In-between mission work:
    - Updating input data to incorporate the 2024 outturn and the latest external environment.
    - Exploring the impact of government restructuring on the CWG.
    - Continue updating the user manual and associated material.

- Phase 2.1. Rebuilding the CWG after Government Restructuring (Mission 6 — March 2025; Mission 7 — July 2025)
  - Mission 6 outputs:
    - Supporting the authorities in preserving the CWG after government restructuring.
    - Discussing the status, roles, and responsibilities of the CWG after the MPI and MOF merger.
    - Providing trainings to help new members operate the MFT.
    - Updating projections to incorporate the 2024 outturn, 2025 state budget, and SEDP.
    - Meeting with the MOF management to discuss work priorities in FY2026.
  - Mission 6 in-between work:
    - Updating projections to incorporate the 2024 outturn and alternative scenarios.
    - Continue updating User Manual and associated material.
  - Mission 7 outputs:
    - Reintroducing the DDT to new CWG members to help them operate MFT and DDT.
    - Discussing and formalizing the roles of the CWG in presenting the projection results in policy discussion.
    - Evaluating the CWG’s workflows, particularly incorporating the roles of new members.
    - Supporting the CWG in presenting the projection results to MOF management.
  - Mission 7 in-between work:
    - Start using the user manual for training of new staff.
    - Exploring policies envisaged by MOF and SBV for the 2026 budget and SEDP.

- Phase 2.2. Preserving the CWG and Sustaining Capacity Development (Mission 8 — December 2025; Mission 9 Concluding Mission — March 2026)
  - Mission 8 outputs:
    - Continue training new CWG members to operate the projection tools.
    - Assisting the CWG in making presentations to MOF management.
    - Completing the user manual and using it to train new members.
    - Discussing the prospect for TA extension to facilitate integration into policy discussion.
  - Mission 8 in-between work:
    - Updating the projections to incorporate the 2025 outturns and the 2026 state budget.
    - Taking stock for presenting the projection results in policy discussions.
  - Mission 9 (Concluding Mission) outputs:
    - Ensuring that the CWG could operate the projection tools independently.
    - Reviewing analysis, forecasting, presentation, and report to meet the policy needs.
    - Reviewing TA implementation, discussing draft TA report, and incorporating feedback.
    - Discussing the plan to preserve the CWG and sustain capacity development.
    - Discussing the prospect for follow-up TA.

- Contextual note included in schedule:
  - The government restructuring and merger between the MPI and MOF led to excessive staff turnover, but the authorities continued to provide strong support to the TA project by preserving the CWG and assigning new staff.
  - The TA team and the authorities agreed that the TA priorities during 2025-26 are rebuilding the CWG and ensuring that the new members could operate the projection tools independently and make presentation to MOF management.

### Core Working Group (CWG) membership snapshots
- As of December 2024 (roles: Input / Analytical / Policy; supervisors and offices listed in source)
  - Core entries numbered 1 to 31 (examples): Nguyen Thi Minh Tho (MPI), Pham Thi Van Anh (MPI), Vu Duc Viet (MPI), ... Vu Thi Loc (MOIT).
  - Supervisors:
    - Nguyen The Ngan (MPI)
    - Hoang Thi Hong (MPI)

- As of March 2026 (roles and institutions listed in source)
  - Core entries numbered 1 to 28 (examples): Bùi Thị Kim Ngân (MOF), Nguyễn Thị Ngân (MOF), Nghiêm Thị Vân (MOF), ... Nguyễn Hoàng Anh (MOF).
  - Supervisors:
    - Vu Duc Hoi (MOF)
    - Hoang Thi Hong (MOF)
    - Ho Viet Huong (MOF)

### TA implementation emphasis and institutional priorities
- Rebuilding and preserving the CWG after the MPI–MOF merger and high staff turnover.
- Ensuring new CWG members can operate MFT and DDT independently and present to MOF management.
- Progressive integration of MFT projections into policy discussions, including quarterly 1317 policy working group meetings.
- Development, updating, and use of a user manual to train successive cohorts of CWG members.

*Sources: IMF staff and the Vietnamese authorities.*

### Annex IV. Summary of the Macroframework Foundations Tool (MFT)

### Purpose and structure
- The MFT is a macroeconomic projection framework producing forecasts based on accounting consistency and economic models or behavioral equations.
- Designed to be simple, consistent, and flexible:
  - Intuitive Excel template with six worksheets.
  - Requires minimal input data of about 60 variables covering country-specific and external environment data.
  - Interlinks all four sectors (real, external, fiscal, and monetary) to satisfy macroeconomic identities.
  - Generates short- to medium-term projections using MFT equations, policy assumptions, and exogenous variables.

### Key features and process
- Simplicity: minimal data requirements and user-friendly Excel implementation.
- Consistency: accounting and economic consistency through interlinked sectors and behavioral equations.
- Flexibility: customizable for longer horizons, greater sectoral detail, or different policy environments.
- By end 2025, the MFT has been used in IMF TA projects in 15 countries.
- Recommended six-step process to operate the MFT:
  - collecting input data,
  - performing consistency checks,
  - customizing behavioral equations,
  - verifying policy and exogenous variables,
  - solving the framework to generate projections,
  - analyzing projection results and building scenarios.

### Internal mechanics
- Uses five behavioral equations (private consumption, private investment, exports, imports, and inflation) to project real GDP components and inflation.
- Projections solved iteratively to achieve internal macroeconomic consistency.
- Behavioral equations are calibrated and customized to the Vietnam economy (see Annex V).

*Sources: IMF staff and the Vietnamese authorities.*

### Annex V. Vietnam: Customizing the MFT Equations

### 1. Real Private Consumption
- Specification:
  - Ct = 0.30 Ct−1 + 0.70 yd t −0.15(rr t − rr t−1)
  - Definitions: Ct is real private consumption; yd t is real private disposable income; rr t is the real interest rate.
  - Coefficients on lagged consumption and disposable income sum to one.
- Outer projection years t+2 to t+5:
  - ECT t = − 1/5 (Ct / Yt P −0.58)
  - yt p is potential GDP; 0.58 corresponds to the historical average consumption share of potential GDP.
- Interpretation:
  - Vietnam’s private consumption is driven more by income rather than real interest rate, consistent with limited household borrowing for consumption and weak monetary transmission through consumer credit.

### 2. Real Private Investment
- Specification:
  - It = 1.00 (yt − yt−1) + 1.00 yt p −0.50(rr t − rr t−1)
  - Definitions: It is real private investment; yt is real GDP; yt p is potential GDP; rr t is the real interest rate.
- Medium-term adjustment:
  - Error correction mechanism guides investment toward a long run level of 30 percent of potential GDP, with a five-year adjustment horizon.
- Interpretation:
  - Investment responds strongly to changes in economic activity and financing costs.

### 3. Real Exports
- Core specification:
  - xt = 0.90 xt−1 + 0.74 m t∗ −0.62 m t−1∗ −0.10 REER t
  - Definitions: xt is real exports; m t∗ is trading partners’ real imports; REER t is the real effective exchange rate.
  - The small REER elasticity reflects deep integration into global value chains and predominance of USD denominated manufacturing contracts.
- Supplementary specification (not embedded in core model):
  - xt = 0.14 m t∗ + 0.57 (m t∗ − m t−1∗) −0.10 REER t + 3.90 kt stock −0.24
  - kt stock is real capital stock growth.
  - This yields lower forecast error but large capital stock coefficient weakens the role of demand and price variables; used only for comparison and forecast judgment.
- Interpretation:
  - Exports dominated by external demand; modest exchange rate elasticity.

### 4. Real Imports
- Core specification:
  - mt = 1.41 yt + 0.31 REER t
  - Definitions: mt is real imports; yt is real GDP; REER t is the real effective exchange rate.
  - Elasticity of imports with respect to GDP exceeding one reflects rising import penetration.
- Supplementary specification (not used in core model):
  - mt = 0.10 Ct + 0.96 xt + 0.10 REER t
  - Ct is real private consumption; xt is real exports.
- Interpretation:
  - Imports depend on income and exports because a large share of imports are used for export production.

### 5. Inflation
- Specification:
  - pt = 0.81 pt−1 + 0.19 pt target + 0.08 ygap t + 0.30 (pt m − pt m,ss)
  - Definitions: pt is CPI inflation; pt target is the SBV inflation objective; ygap t is the output gap; pt m denotes import price inflation in domestic currency.
  - Import price definition:
    - pt m = (1+π t∗ )(1+∆ER t ) −1
    - π t∗ denotes trading partners’ inflation; ∆ER t the nominal exchange rate change.
  - pt m,ss defined as a 5 year moving average (steady state), ensuring convergence to the inflation objective when the output gap closes.
- Interpretation:
  - Inflation dynamics largely backward looking and driven by import prices with limited impact of output gap, consistent with a high share of imported goods in the CPI basket.

*Sources: IMF staff and the Vietnamese authorities.*

### Annex VI. User Manual content (summary)
- The TA program includes development and progressive completion of a user manual and associated materials for the MFT and DDT.
- User manual objectives:
  - Train new CWG members.
  - Standardize operation and presentation of projection tools.
  - Facilitate handover and capacity preservation after government restructuring.
- Timetable for user manual work embedded across missions from Phase 1.3 onward, with completion targeted during Phase 2.2 activities.

*Sources: IMF staff and the Vietnamese authorities.*

### Annex VII. The Logical Framework

### Annex VII. The Logical Framework

### Objective
- Develop capacity in macroeconomic forecasting and policy analysis to support policy decision making and communications - MFR

### Outcome: Baseline understanding of forecasting and analytical capabilities
- Outcome: Authorities have a baseline understanding of their existing forecasting and analytical capabilities and opportunities for improvement
- Annual Assessment Rating: 4 Fully Achieved
- Annual Assessment Narrative: The IMF TA mission and the authorities agreed on the scope, priorities, and workplan of the TA project, and the TA Report from the scoping mission has been published on the IMF Website.
- Outcome Rating Date: 5/9/2024
- Outcome Indicator / Baseline Value / Target Value / Current Assessment Value:
  - Diagnostic/scoping produced an overview of existing (baseline) capacities and opportunities for improvement supported by an action plan and agreed upon key outcomes and deliverables
    - Baseline Value: There is a limited documentation of the authorities' existing capabilities and the coordination among relevant agencies.
    - Target Value: Report of existing forecasting and analytical capabilities has been produced.
    - Current Assessment Value: Overview of existing capacities and opportunities for improvement was produced in July 2023 as of 1/28/2026
- Milestones:
  - Aide Memoire detailing findings from the scoping mission is produced
    - Target Completion Date: 7/6/2023
    - Milestone Actual Completion Date: 7/6/2023
    - Milestone Rating: 4 Fully Achieved as of 6/21/2024
  - Detailed TA action plan is agreed by the authorities
    - Target Completion Date: 7/6/2023
    - Milestone Actual Completion Date: 7/6/2023
    - Milestone Rating: 4 Fully Achieved as of 6/21/2024

### Outcome: Improved analytical skills, and better macroeconomic forecasting and policy analysis capacity
- Outcome: Improved analytical skills, and better macroeconomic forecasting and policy analysis capacity
- Annual Assessment Rating: 4 Fully Achieved
- Annual Assessment Narrative: The Core Working Group has completed trainings on Financial Programming and Policy, developed macroeconomic projection tools, produced projections, and presented the results to the policy makers.
- Outcome Rating Date: 3/18/2026
- Outcome Indicator / Baseline Value / Target Value / Current Assessment Value:
  - Relevant staff have successfully completed agreed training delivered via various modalities (online, classroom courses, workshops)
    - Baseline Value: No baseline
    - Target Value: 80 percent of staff in the CWG have taken FPP/MDS/DDT training.
    - Current Assessment Value: All CWG staff have taken IMF FPP/MFT/DDT training in July 2025 as of 1/28/2026
  - Analytical framework centered around the MPT is used to produce medium-term forecasts, scenarios as well as risk and policy analysis
    - Baseline Value: No MPT is used to produce forecasts and policy analysis
    - Target Value: MPT is completed by the CWG and used to produce medium-term forecasts and policy analysis
    - Current Assessment Value: The CWG started making projections using MFT in March 2024 as of 1/28/2026
  - Relevant staff demonstrates the capability to independently operate the MPT and other auxiliary analytical models and tools
    - Baseline Value: The CWG has not used the MPT
    - Target Value: The CWG independently operates the MPT
    - Current Assessment Value: More than 10 CWG members could operate the MPT in June 2024 as of 1/28/2026
  - Roles and responsibilities identified/streamlined/clarified within the core forecasting team
    - Baseline Value: Roles are not clear and not well documented
    - Target Value: Roles and responsibilities of the CWG are clear and documented
    - Current Assessment Value: The MPI formally issued guidance on the CWG's roles and responsibilities in March 2024 as of 1/28/2026
- Milestones (selected):
  - 40 percent of CWG members have taken either in-person or online FPP/MDS course
    - Target Completion Date: 10/31/2023
    - Milestone Actual Completion Date: 10/31/2023
    - Milestone Rating: 4 Fully Achieved as of 1/11/2024
  - Clear roles and responsibilities within the CWG on analysis and forecasting are agreed and established
    - Target Completion Date: 10/31/2023
    - Milestone Actual Completion Date: 3/4/2024
    - Milestone Rating: 4 Fully Achieved as of 4/22/2025
  - CWG successfully provides data input for the MPT, conducts consistency checks, and identifies data issues
    - Target Completion Date: 11/30/2023
    - Milestone Actual Completion Date: 12/31/2023
    - Milestone Rating: 4 Fully Achieved as of 6/21/2024
  - 60 percent of CWG members have taken either in-person or online FPP/MDS course
    - Target Completion Date: 12/31/2023
    - Milestone Actual Completion Date: 10/31/2023
    - Milestone Rating: 4 Fully Achieved as of 1/11/2024
  - 80 percent of CWG members have taken either in-person or online FPP/MDS/DDT course
    - Target Completion Date: 6/30/2024
    - Milestone Actual Completion Date: 10/31/2023
    - Milestone Rating: 4 Fully Achieved as of 6/21/2024
  - CWG successfully runs the baseline scenario for projection and interprets the results
    - Target Completion Date: 6/30/2024
    - Milestone Actual Completion Date: 3/26/2024
    - Milestone Rating: 4 Fully Achieved as of 4/10/2025
  - CWG successfully designs and runs the risks and policy scenarios including debt projection, and interprets the results
    - Target Completion Date: 10/31/2024
    - Milestone Actual Completion Date: 3/15/2026
    - Milestone Rating: 4 Fully Achieved as of 3/18/2026
  - One year passed with the CWG members and participation maintained or replaced with equivalent numbers of members
    - Target Completion Date: 10/31/2024
    - Milestone Actual Completion Date: 10/31/2024
    - Milestone Rating: 4 Fully Achieved as of 12/17/2025

### Outcome: Analytical models and forecasting tools are developed and operational
- Outcome: Analytical models and forecasting tools are developed and operational
- Annual Assessment Rating: 4 Fully Achieved
- Annual Assessment Narrative: The Core working Group (CWG) has developed macroeconomic projection tools and produced projections. The CWG has completed the user manuals.
- Outcome Rating Date: 12/19/2025
- Outcome Indicator / Baseline Value / Target Value / Current Assessment Value:
  - Macroeconomic Projection Tool (MPT) is developed in the form of an Excel-based macroeconomic framework for forecasting and policy analysis, respecting accounting relationships
    - Baseline Value: No MPT is developed
    - Target Value: The MPT is developed with all key features
    - Current Assessment Value: The CWG has developed Macro-Foundation Tool (MFT) and started operating it to make projections in March 2024 as of 1/28/2026
  - A user manual on MPT and other auxiliary models and tools is prepared, and is readily available to all staff
    - Baseline Value: No user manuals exist
    - Target Value: User manuals have been prepared and available
    - Current Assessment Value: The CWG completed the user manual in December 2025 as of 1/28/2026
- Milestones:
  - The CWG has fully customized the tool for the Vietnamese economy to run baseline, policy, and debt scenarios
    - Target Completion Date: 10/31/2024
    - Milestone Actual Completion Date: 10/31/2024
    - Milestone Rating: 4 Fully Achieved as of 12/17/2025
  - Initial draft of user manual is developed
    - Target Completion Date: 10/31/2024
    - Milestone Actual Completion Date: 10/31/2024
    - Milestone Rating: 4 Fully Achieved as of 12/17/2025
  - User manual is finalized
    - Target Completion Date: 10/31/2025
    - Milestone Actual Completion Date: 12/12/2025
    - Milestone Rating: 4 Fully Achieved as of 12/17/2025

### Outcome: Decision-making process is well-structured, streamlined, and documented
- Outcome: Decision-making process is well-structured, streamlined, and documented, and associated roles and responsibilities are well-defined.
- Annual Assessment Rating: 4 Fully Achieved
- Annual Assessment Narrative: The Core Working Group (CWG) and its roles and responsibilities in developing and using the macroeconomic projection tool to produce macroeconomic projections have been established.
- Outcome Rating Date: 3/18/2026
- Outcome Indicator / Baseline Value / Target Value / Current Assessment Value:
  - Modelling Unit is set up and made solely responsible for operating the MPT
    - Baseline Value: The CWG working on MPT has not been set up
    - Target Value: The CWG is established with well-specified responsibilities
    - Current Assessment Value: The CWG was established in October 2023 as of 1/28/2026
  - Projection Coordinator assumes official responsibility for coordinating and leading the forecasting activities
    - Baseline Value: The projection coordinator has not been assigned
    - Target Value: Well-defined roles of the CWG in coordination with the policy group and other relevant agencies
    - Current Assessment Value: Roles and responsibilities of CWG members have been well-defined by CWG regulation issued in March 2024 as of 1/28/2026
- Milestones:
  - Formal appointment of the CWG with its members, roles, responsibilities, and tasks
    - Target Completion Date: 9/30/2023
    - Milestone Actual Completion Date: 10/5/2023
    - Milestone Rating: 4 Fully Achieved as of 12/17/2025
  - Discussion and reconciliation of inputs into MPT
    - Target Completion Date: 11/30/2023
    - Milestone Actual Completion Date: 12/31/2023
    - Milestone Rating: 4 Fully Achieved as of 12/17/2025
  - Agreement on roles, responsibilities, and output between the CWG and policy decision group in relation to the analytical tool
    - Target Completion Date: 12/31/2023
    - Milestone Actual Completion Date: 3/8/2024
    - Milestone Rating: 4 Fully Achieved as of 12/17/2025
  - Discussion and reconciliation of baseline projection results
    - Target Completion Date: 6/30/2024
    - Milestone Actual Completion Date: 3/26/2024
    - Milestone Rating: 4 Fully Achieved as of 12/17/2025
  - Discussion and reconciliation of risk and policy scenarios as well as debt projection results
    - Target Completion Date: 10/31/2024
    - Milestone Actual Completion Date: 12/17/2025
    - Milestone Rating: 4 Fully Achieved as of 3/18/2026

### Outcome: Decisionmakers use MPT-based analysis in policy formulation
- Outcome: Decisionmakers understand the structure and function of the Macroeconomic Projection Tool (MPT), and use staff’s MPT-based analysis and forecast in the policy formulation process
- Annual Assessment Rating: 4 Fully Achieved
- Annual Assessment Narrative: The Core Working Group (CWG) meets regularly with the policy makers and started participating in the quarterly meeting of the inter-ministerial policy working group.
- Outcome Rating Date: 3/18/2026
- Outcome Indicator / Baseline Value / Target Value / Current Assessment Value:
  - Forecasting team regularly interacts with policymakers
    - Baseline Value: The forecasting team has not been established
    - Target Value: The CWG meets regularly with the inter-ministerial working group on policies
    - Current Assessment Value: The CWG started participating in the quarterly meeting of the 1317 inter-ministerial policy working group in March 2024 as of 1/28/2026
- Milestones:
  - CWG produces report/presentation on the baseline scenario
    - Target Completion Date: 6/30/2024
    - Milestone Actual Completion Date: 3/26/2024
    - Milestone Rating: 4 Fully Achieved as of 6/21/2024
  - CWG makes presentation on the baseline scenario results to policy makers
    - Target Completion Date: 10/31/2024
    - Milestone Actual Completion Date: 3/26/2024
    - Milestone Rating: 4 Fully Achieved as of 6/21/2024
  - CWG produces report/presentation on the risk and policy scenarios including debt projection
    - Target Completion Date: 10/31/2024
    - Milestone Actual Completion Date: 12/31/2024
    - Milestone Rating: 4 Fully Achieved as of 12/17/2025
  - CWG makes presentation on the risk and policy scenarios including debt projection to policy makers
    - Target Completion Date: 2/28/2025
    - Milestone Actual Completion Date: 3/15/2026
    - Milestone Rating: 4 Fully Achieved as of 3/18/2026

*Annex VII. The Logical Framework (from the IMF TA Report content provided).*

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_Source: https://www.imf.org/-/media/files/publications/tar/2026/english/tarea2026065.pdf_