Vietnam has set an ambitious goal of achieving economic growth of up to 10% during the 2026-2030 period. Yet with nearly half of 2026 already behind it, the economy is still grappling with a familiar problem: getting public investment money out the door. The challenge facing fiscal policy At the end of the first week of June 2026, Israel and Iran unexpectedly exchanged attacks, marking the first outbreak of fighting since the ceasefire reached in April. Although both sides later halted hostilities following calls from U.S. President Donald Trump, the episode highlighted how hopes for lasting peace in the Middle East are fading as negotiations stall and ceasefire agreements repeatedly come under pressure. The conflict continues to trigger the largest energy shock in decades, pushing up oil prices and production costs worldwide. Vietnam is not immune to these pressures. The country is facing rising inflation risks and exchange-rate pressures, even as foreign exchange reserves have narrowed, leaving policymakers with less room to maneuver on monetary policy. Easing too aggressively to support growth could further fuel inflation and weaken the currency. In this environment, expansionary fiscal policy is increasingly seen as the main engine for growth. More importantly, Vietnam still has […]