Viet Nam Macro Monitoring

Overview & Synopsis

Economic activity remained resilient through July, supported by exports and manufacturing, but faster import growth widened the trade deficit and increased exchange-rate pressure. Inflation eased, although higher global oil prices could renew fuel, transport and production-cost pressures. The equity market corrected sharply amid persistent foreign selling, while constrained banking liquidity required renewed SBV injections in early August. Exchange-rate pressure, reinforced by strong USD demand and elevated US interest rates, constrained the SBV’s ability to provide sustained VND liquidity. Fiscal revenue outperformed, partly because of tax-payment timing, while slow public-investment disbursement limited support to growth.