The IMF has released the results of its Vietnam Staff Report for the 2023 Article IV Consultation which pushes for more spending to boost the economy in light of limited room to adjust monetary policy.
Key takeaways:
- The IMF noted that high growth rates over the medium term could be achieved through structural reforms;
- Inflation will likely remain under the 4.5 percent target set at the start of the year;
- Adjustments made to monetary policy should be done cautiously; and
- Vietnam should be more flexible with its exchange rate.
Note: The consultation took place in June and in the three months since the value of the local currency has continued to decline and credit growth has grown only marginally. There have also been several major bond issues used to pump up the value of the dong.