Vietnam's Finance Minister Cautions on Inflation Pressure

The Vietnamese economy has navigated the first four months of the year with notable achievements, earning positive assessments from international organizations. However, as Minister of Finance Ngô Văn Tuấn highlighted, growth in several key sectors has not yet reached the desired double-digit trajectory. This nuanced performance underscores the ongoing challenges in fully realizing the nation's economic potential.

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In general, the socio-economic situation in the first four months of the year continued to achieve many important results, which were positively assessed by international organizations. However, the growth of many industries and sectors has not yet reached the scenario required for double-digit growth.

A primary concern remains the persistent pressure of inflation. The CPI in April saw a significant increase, driven by rising global oil prices and their cascading effects on transportation, food, and construction materials. Despite government efforts to reduce fuel taxes to zero and maintain prices below regional levels, the upward trend in global benchmarks continues to impact domestic costs. Furthermore, the anticipated rise in electricity prices due to peak season demand and the planned adjustments in healthcare and education expenses add to the inflationary outlook.

In response, the Ministry of Finance has put forth several recommendations to the government. These include ensuring a stable and competitive supply of fuel and electricity, particularly during the hot season, to support the target of double-digit growth. The Ministry also stressed the importance of efficiently managing state budget advances for the fuel price stabilization fund. Additionally, directives were issued for the Ministry of Construction to provide clear guidelines on adjusting construction material contracts amidst price volatility and for local authorities to expedite the approval of material sources to meet project demands.

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The pressure of inflation in the coming time continues to need to be closely monitored.

While the total retail sales of goods and consumer services show a positive year-on-year increase, they still fall short of the government's resolution targets. Similarly, while international tourist arrivals have grown, they have only reached about a third of the annual goal. The report also noted that a significant portion of the 2026 state budget capital remains unallocated by various ministries and localities. On a brighter note, registered FDI has seen a substantial increase, though actual disbursed FDI has grown at a more moderate pace. The government's focus remains on facilitating businesses to expedite investment procedures and bring registered projects to fruition, reflecting a commitment to sustained economic development amidst global uncertainties.

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Ensure sufficient supply of gasoline and oil at competitive prices; ensure sufficient electricity in the hot season to serve the goal of double-digit growth.