Vietnam: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Vietnam

IMF Staff Country Reports, September 27, 2024

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Bibliographic details

• Published: September 27, 2024
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9798400290404.002

Macroeconomic performance and near-term projection

• 2023 growth: "the Vietnamese economy grew by 5 percent" amid challenging conditions.
• 2024 projection: "Economic growth is projected to recover to 6.1 percent in 2024", supported by:
  • "continued strong external demand"
  • "resilient foreign direct investment"
  • "accommodative policies"
• Domestic demand: "Domestic demand growth is expected to recover gradually as corporates navigate through high debt levels".
• Real estate: "the real estate sector will only fully recover over the medium term".

Inflation and monetary stance

• Inflation outlook: "Inflation is expected to hover around the State Bank of Vietnam’s target of 4–4.5 percent in the year of 2024".
• Monetary policy implication: accommodative policies are supporting the near-term recovery while inflation remains near the stated target.

Financial sector and risks

• Key headwinds in 2023: "turbulence in the real estate sector, financial distress, and a significant drop in exports".
• Corporate sector risks: high corporate debt is constraining the pace of domestic demand recovery and implies a gradual deleveraging process.
• Fiscal–monetary interaction: "The fiscal stimulus is helping sustain domestic demand, including investment, which facilitates private sector deleveraging."
• Contingent fiscal response: "fiscal support may need to be scaled down if there was a large inflation surprise."

Fiscal policy and governance

• Short-term role: fiscal stimulus is currently supporting demand and investment.
• Medium-term recommendation: "An upgraded fiscal framework would help improve public policies and manage challenges ahead."
• Policy trade-offs: balancing continued fiscal support for recovery against inflation risks and fiscal sustainability.

Structural and medium-term priorities

• Growth challenge: "Sustaining high medium-term economic growth, amidst demographic and climate headwinds, requires broader structural reforms".
• Priority reform areas:
  • "boost productivity"
  • "address climate challenges"
  • "strengthen governance"

Subjects and keywords covered

• Anti-money laundering and combating the financing of terrorism (AML/CFT)
• Credit
• Crime
• Financial sector policy and analysis
• Financial sector stability
• Inflation
• Money
• Prices
• Additional keywords listed: authorities of Viet Nam, Global, IMF-World Bank Financial Sector Assessment Program, IMF's Institute for Capacity Development, SBV management, USD trading band

Source: Vietnam: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Vietnam

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• Credit, Economic Growth, and Financial Risks
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  • Credit, Economic Growth, and Financial Risks (PDF)