The IMF’s 2025 Article IV mission to Vietnam, wrapped up this week, with mission chief Paulo Medas warning that global trade tensions and financial uncertainty pose serious risks to the country’s outlook→view source.
Key details:
- Trade uncertainty: Medas cautioned that high global tariffs expected from Q3 2025 could slow Vietnam’s growth. Risks are compounded by tightening global financial conditions and high corporate debt.
- Policy flexibility: He urged the government to rely more on fiscal tools to cushion shocks, noting that public debt remains low. Monetary policy, however, has limited room and should focus on anchoring inflation expectations.
- Exchange rate: Medas emphasised the importance of allowing greater exchange rate flexibility to help the economy adjust to external pressures.
- Banking risks: Strengthening bank supervision, capital buffers, and resolution frameworks were highlighted as key to preventing renewed financial stress.
- Reform priorities: Medas strongly supported the government’s reform agenda—particularly on institutional efficiency, private sector development, infrastructure, and governance—but warned that execution will determine impact.
- Statistical capacity: He noted Vietnam’s rapid growth is outpacing its economic data systems and called for urgent improvements to support effective policy making.
That is to say, with external risks building, Vietnam’s ability to manage shocks and maintain momentum depends on delivering structural reforms, strengthening institutions, and modernising policy frameworks.
See also: Vietnam’s Economy in May: Unpacked