On Wednesday, the National Statistics Office (NSO) released its July economic update.
The results were better than expected.
Despite trade uncertainty coming out of the US imports and exports both increased.
Consumer prices also registered a slight decline year-on-year, even though the dong continued to slide against the greenback.
Moreover, S&P’s Purchasing Manager’s Index reflected a 3.5 point jump back into expansion territory, in spite of also recording a fall in new export orders.
In this context, this article breaks down the key data points and policy factors that shaped Vietnam’s economic landscape in July 2025.
Key developments
Credit growth targets were increased.
The State Bank of Vietnam increased credit growth targets for the banking sector.
The original target, set at the beginning of the year, was 16 percent. The revised figure has not yet been disclosed.
This change is in line with credit growth underpinning Vietnam’s economic expansion in 2025, rising by around 10 percent in the first half of the year.
It is worth noting, however, that injecting more credit into the economy is likely to add further pressure on the banking sector’s fundamentals, which are already being strained.
The trade deal between Vietnam and the US was questioned.
A trade deal with the United States was announced by the American president on July 2 that would see tariffs of 20 percent on imports from Vietnam and 40 percent on transhipped goods.
However, it was also reported that the agreement announced was not what the government of Vietnam had been expecting. Instead, it had thought the tariff would be somewhere in the 10 to 15 percent range.
Subsequently, information coming out of the Vietnamese authorities has been limited.
A leaked government document, however, did suggest that Vietnam could lose up to US$37 billion in export revenue at the rates announced by Trump.
The stock market reached an all-time high.
The VN-Index reached 1,557.42 on July 28, the highest it had ever been. By the end of the month, it was up 9 percent over the start.
This drew a lot of media attention; however, it has been concentrated in just a few stocks with low floats—mostly in the VinGroup ecosystem.
In this context, the index as an indicator of the health of the overall market should be taken with a grain of salt.
A ban on petrol-powered motorbikes in Hanoi was announced.
The Prime Minister directed the Hanoi People’s Committee to come up with a plan to ban petrol-powered motorbikes in the city centre by the middle of 2026.
This will have broad economic implications for a city that is hugely dependent on two-wheel transport, with household budgets, the public transport system, and the electricity grid likely to become increasingly strained in the transition.
Macroeconomy
Currency
The Vietnamese dong continued to devalue against the greenback in July.
The State Bank of Vietnam (SBV) opened the month with the central exchange rate at VND 25,058 to the dollar, but by July 31, it was trading at VND 25,240, an increase of VND 182 or 0.73 percent.
Inflation
Inflation slowed a little in July, reaching just 3.19 percent year-on-year, down from 3.57 percent in June.
Month-on-month, however, it increased by about .11 percentage points.
The National Statistics Office attributed this to increased power consumption due to hotter weather and increased prices of building materials due to shortages and higher production and transportation costs.
Manufacturing
Vietnam’s Index of Industrial Production (IIP)
Vietnam’s industrial production continued to show stable growth in July, with the Industrial Production Index (IIP) rising 0.5 percent month-on-month and 8.5 percent year-on-year.
Cumulative growth over the first seven months of 2025 reached 8.6 percent year-on-year, slightly higher than the same period in 2024.
S&P Global Manufacturing PMI
The S&P Global Manufacturing PMI rose to 52.4—its highest level in nearly a year—up from 48.9 in June.
This was despite a continued decline in exports due to US tariffs—overseas orders decreased for the ninth straight month, the index found.
Trade
Trade continued to expand.
Both imports and exports climbed in July, which seems somewhat surprising in the wake of trade policy uncertainty coming out of the US.
Pundits have been quick to attribute this to buyers ratcheting up orders to beat the Trump tariffs.
However, an extension to the tariff pause from August 1 to August 7 was only announced on July 31. Factoring in shipping time, last orders really needed to be in around the middle of July.
What to watch in August
The 20 percent tariff announced July 2 on goods from Vietnam entering the US is set to come into effect August 7.
Assuming there is no clear guidance with respect to clamping down on transhipment, it may still be cheaper for Chinese firms to ship through Vietnam. This could somewhat blunt the impact of these tariffs.
Vietnam’s stock market is in bubble territory and looks overdue for a correction. That said, it has looked that way for months, and yet the rally continues.
Finally, there looks to be a lot of pressure on the local currency, and there haven’t really been any signs that this might let up anytime soon. As the dong slips further, this should put pressure on prices, and an uptick in inflation, in theory, should be on the cards.