Public discourse in Vietnam, in November, was largely dominated by typhoon Kalmaegi, which tore through Vietnam’s central provinces dumping some 280 millilitres of rain. This devastated crops and livelihoods and sent vegetable prices soaring, doubling or even tripling in some places.
This was then reflected in a rise in Vietnam’s consumer price index of .45 percent month-on-month, bringing the year-to-date figure to 3.58 percent. This was the highest it had been since January, but was in line with a slow trend upward.
That said, generally, the economy continued to perform relatively well.
Industrial production, for example, continued to climb, recording a bump of 2.3 percent over October and up 10.8 percent year-on-year.
It was a similar story for S&P Global’s Purchasing Managers’ Index, which recorded an expansion in the manufacturing sector for the fifth month in a row, coming in at 53.8. This was slightly down over October but still well above the 50-point break-even mark.
Moreover, foreign direct investment continued to climb.
Pledged FDI had reached US$33.69 billion as of November 30, up 7.4 percent from the same period last year, with disbursed FDI reaching US$23.6 billion, up 8.9 percent from a year earlier.
It wasn’t all good news, however.
Foreign outflows from the Ho Chi Minh Stock Exchange continued to the tune of US$262.5 million, adding to a total for the year so far of US$4.85 billion.
Total import and export turnover of goods in November was also down, coming in at an estimated US$77.06 billion, a decline of 5.4 percent from October. This, however, looked to be largely due to seasonal demand variations as Christmas drew closer and the time to ship to key export markets in time for the holidays closed.
It was also still up 15.6 percent from a year earlier, so not a hugely consequential decline in the larger scheme of things.
There were also positive signs for trade more broadly with US President Donald Trump signing an executive order removing coffee (one of Vietnam’s biggest agricultural exports) from his “reciprocal” tariffs schedule.
By the end of November, year-to-date, Vietnam had shipped US$432.75 million worth of coffee to the USA.
All of that said, systemic and policy issues that have weighed on investor sentiment this year continued to present a challenge.
Vietnam’s expansionary monetary policy, with interest rates kept low and the dong strong through Forex and open market interventions, at the same time as credit growth has been pushed to realise higher than normal economic growth, has continued to create pressure on the local currency.
Notably, the State Bank of Vietnam responded by allowing the dong to weaken from 25,093 dong to the dollar to 25,155 by the end of the month.
Furthermore, banks were also struggling to find the money to lend, increasing their deposit interest rates, in some cases as high as regulations would allow. They also leaned heavily on cash injections from the SBV, with approximately US$11.37 billion worth of reverse repos issued over the course of the month.
The bond market, another key source of capital for Vietnam’s banks, also continued to record significant growth with 24 private placement issuances worth VND 19,608 billion (US$744.1 million).
On that note, the average yield on Vietnam government bonds continued to climb, clocking in at 3.72 percent up from 3.55 percent in October. In the context of a push for greater public investment to drive economic growth, which, to be successful, will require the government to borrow more, this could be significant.
That said, stronger economic growth thus far this year has largely been led by private lending, with credit growth for the year reaching 16.56 percent by the end of November.
Fitch Ratings, incidentally, last month, raised concerns about removing credit growth limits, which have kept bank lending in check for the past decade or so.
“It’s going to accelerate credit growth, which is already very high,” Willie Tanoto, senior director at Fitch Ratings, was quoted by Bloomberg as saying. He also went on to say he has grown more concerned in the past year than in the last five.
Tanoto wasn’t the only observer ringing alarm bells, either.
Fulbright economist Nguyen Xuan Thanh warned that maintaining aggressive growth targets could strain macro-stability, with inflation and exchange-rate pressure likely to extend into 2026, as reported by Dau Tu Kien Thuc.
Similarly, economist Nguyen Xuan Hai was cited by VN Economy as saying shifting prematurely toward a consumption-driven model could fuel inflation and erode export competitiveness, stressing that sustainable growth requires continued capital accumulation, productivity reform, and industrial upgrading.
Nevertheless, there were few signs that a change of course was on the horizon heading into December.
That is to say, Vietnam’s economy showed a strong upward trajectory in November; however, sustainability concerns persist.