HCMC – Standard Chartered Bank has projected a rise in Vietnam’s inflation, estimating the year-on-year rate to increase to 3.8% in February from 3.6% in January 2025, according to its latest macroeconomic update.
This would mark the seventh consecutive month of inflation remaining below 4.0% year-on-year.
However, the bank’s economists anticipate that the recent upward trend, which began in December, will continue. Any temporary moderation is expected to be short-lived, with demand-driven factors potentially adding to inflationary pressure in the near future.
The Vietnamese Government has raised its 2025 growth target to at least 8%, while increasing its inflation forecast to 4.5-5.0% to allow for greater monetary policy flexibility. The stronger growth outlook may help sustain low interest rates in the short term.
However, Standard Chartered expects the State Bank of Vietnam (SBV) to raise interest rates by 50 basis points in the second quarter of this year in response to rising inflation.
Retail sales growth is expected to slow to 8.2% year-on-year in February, down from 9.5% in January, according to Standard Chartered’s estimates.
Meanwhile, export growth may climb to 23.2% year-on-year, supported by a low base and continued improvements in electronics exports. Imports and industrial production are also likely to have grown by 24% and 6.2% year-on-year, respectively.
However, Vietnam’s monthly trade surplus may shrink to US$1.5 billion, down from US$3 billion in January.
Tim Leelahaphan, senior economist for Thailand and Vietnam at Standard Chartered Bank, expressed caution regarding the near-term economic outlook.
“We remain cautious on the near-term economic outlook, as January’s macro indicators showed a moderation in both domestic and external data. Uncertainties around U.S. trade policies also pose potential risks, given Vietnam’s large trade surplus with the U.S. In response, Vietnam has indicated its willingness to import more U.S. agricultural products,” he said.
