Vietnam has long been a success story, consistently posting high GDP growth year after year, while absorbing a substantial portion of Western demand for manufacturing previously handled by China. However, the ongoing impact of President Trump’s Liberation Day tariffs, coupled with the USA’s significant trade deficit with Vietnam, raises concerns that Vietnam’s reliable growth trajectory could face headwinds in the near term.
Monetary Policy, Inflation & Interest Rates
As it does each year, on 20th January, the State Bank of Vietnam (SBV) issued Directive No.01/CT-NHNN (2025) to guide the banking sector in fostering macroeconomic stability, controlling inflation, and supporting economic growth. The SBV has set a credit growth target of around 16% for 2025. In March, responding to post-Tet rate increases, the SBV instructed commercial banks to reduce deposit interest rates. A mean reduction of 0.7% saw most one-year fixed deposit rates fall below 6% per annum.As it does each year, on...
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