The Government's inflation target remains within reach despite mounting headwinds. Several forecasts suggest inflation can stay below 4.5% this year if international oil prices continue to retreat. Extending domestic fuel tax incentives through year-end, along with stable electricity prices, healthcare fees and exchange rates, would offer additional relief.
Industrial production continued to be a major growth driver. The Index of Industrial Production (IIP) in May increased 8.8% year-on-year, while the five-month figure rose 9.1%, the highest growth rate in four years. Manufacturing and processing expanded by 9.5%, contributing 7.4 percentage points to overall industrial growth.
Vietnam has kept inflation below 4% since 2015, and maintaining macroeconomic stability while effective inflation control in 2026 will be crucial to supporting the country’s goal of achieving double-digit GDP growth.
Prime Minister Pham Minh Chinh warned of potential impacts on the country’s macroeconomic stability, particularly inflation and growth, as well as on energy security and logistics due to rising prices, possible supply chain disruptions, the safety of Vietnamese citizens abroad, national defence and security, public order and foreign affairs while chairing a government meeting.
