Last Friday, the National Statistics Office (NSO) released its June economic update.
In short, inflation is still headed upward as previously suppressed prices are allowed to climb, the dong is continuing to depreciate amid limited foreign reserves and an aversion to interest rate rises, and manufacturing and trade data continues to reflect uncertainty brought on by the Trump tariff-pause July 9 deadline.
This article breaks down the key data points and policy factors that shaped Vietnam’s economic landscape in June.
Policy developments
A 2 percent cut to Vietnam’s value-added tax (VAT) was extended to the end of 2026.
The move is expected to cost the state budget VND 39.54 trillion (US$1.52 billion) in the second half of 2025 and VND 82.2 trillion (US$3.15 billion) in 2026.
This is another in a long line of extensions of the tax cut, which first began back in 2022 to help with the economy’s recovery after the COVID-19 pandemic.
It is, however, a little different this time around.
Whereas past extensions have generally been six months at a time and framed as a relief mechanism for local businesses, this latest 18-month extension is being framed as supporting GDP growth targets for this year and next.
A crackdown on currency and gold speculation was announced as a means to mitigate any impacts of the conflict in the Middle East.
It’s not, however, clear that speculation has a significant impact on local prices and, by extension, that an administrative crackdown alone will have a significant impact.
That said, it speaks to a policy preference for pursuing lower-impact options in responding to economic risks as opposed to stronger, more permanent measures.
The former carrying significantly more risk than the latter.
Macroeconomic conditions
The dong continued to depreciate against the greenback.
The US dollar fell 1.34 percent in June, per the DXY index, compared to May, but increased by .32 percent against the Vietnamese dong, according to the NSO.
State Bank of Vietnam (SBV) interventions continued with just over US$5.1 billion worth of cash pumped into the economy through reverse repo agreements and US$478 million withdrawn through treasury bills–the first time treasury bills have been used in about four months.
See also: How Low Can the Vietnamese Dong Go? Why It’s Sliding & What Might Happen Next
Inflation continued to climb.
Vietnam’s Consumer Price Index continued to inch up in June, reaching 3.57 percent.
This is the highest it has been since July of last year, excluding its seasonal high (pre-Lunar New Year) of 3.63 percent in January.
Whereas most prices seem to be relatively steady, housing, electricity, water, fuel and construction are pulling the index up.
This is in line with an electricity price hike on May 10, the impacts of which carried over into the start of June, as well as a jump in electricity usage as the summer heat kicks in.
It is also connected to broadly reported shortages of construction materials linked to an increase in demand from major infrastructure projects, as well as bureaucratic hurdles that have seen some producers forced to stop operating.
Manufacturing
S&P Global’s Purchasing Managers’ Index (PMI) fell.
Vietnam’s manufacturing sector faced renewed headwinds in June, with the S&P Global Manufacturing PMI slipping to 48.9 from 49.8 in May.
This marked the third consecutive month below the 50-point no-change threshold, indicating a modest deterioration in business conditions as the first half of 2025 came to an end.
Notably, the PMI is a survey measuring perceptions and business sentiment.
That is to say, whereas quantitative trade and manufacturing data in June reflected improvements in the business environment, manufacturers seemed to recognise this as temporary in line with uncertainty around what the US tariff regime might look like after July 9.
Vietnam’s Index of Industrial Production (IIP) climbed.
As above, the IIP continued to climb in line with increased orders on the back of pending tariffs.
Note, however, that the rate of growth has slowed.
Whereas May’s IIP was up 17.2 percent compared to May of last year, June’s IIP was up just 4.1 percent over June 2024.
Trade
Total trade held steady, close to all-time highs.
Vietnam’s exports reached US$39.49 billion in June, a 16.3 percent increase over June 2024.
Conversely, Vietnam’s imports grew by 20.2 percent, reaching US$36.66 billion.
Combined, this saw the country record a trade surplus of US$2.83 billion.
Source: National Office of Statistics, Vietnam General Department of Customs
What to watch in July
With Trump’s “reciprocal tariffs” set to kick in on July 9 (although this now looks to have been pushed back to August 1), July is shaping up to be an interesting month.
As it stands, Vietnam has reached a “trade deal” with the US, though details are limited and it’s not clear when or how this might be implemented.
The bulk of the impacts of the uncertainty in the months leading up to the deal, however, have likely already been reflected in the data, with cautious buyers likely to have completed stocking up in anticipation of a July 9 deadline.