Inflation remained well and truly under control in the first ten months of 2025, auguring well for a similar result for the year as a whole.

The latest report from the National Statistics Office (NSO) at the Ministry
of Finance (MoF) put the increase to the consumer price index (CPI) in October at
0.2 per cent against September, 2.82 per cent since December 2024, and 3.25 per
cent year-on-year. The increase in the first ten months of 2025 was 3.27 per cent
year-on-year.

The main factors behind the October CPI increase were higher food prices in
cities and provinces affected by flooding, rising costs of dining out due to higher
ingredient prices, and adjustments to tuition fees in non-public education for the
new school year. Housing, electricity and water, construction materials, clothing,
household equipment, and other categories increased only slightly, reflecting recovery
in consumer demand and higher production costs as the end of the year
approaches.

Core inflation stable

According to the NSO, the average monthly CPI increase was 0.28 per cent since
the start of the year; lower than in the same period of 2024. Main contributors
included food and catering services (up 3.18 per cent), housing and construction
materials (up 6.2 per cent), medicine and healthcare services (up 13.39 per cent),
and education (up 1.95 per cent). Conversely, transportation (down 2.61 per cent)
and postal and telecommunications services (down 0.48 per cent) helped limit overall
growth.

Its figures also show that core inflation in October rose 0.35 per cent from
September and 3.30 per cent year-on-year. On average, during the ten-month
period, core inflation increased 3.20 per cent year-on-year, or slightly below overall
CPI growth.

Results indicate that price and monetary policies are moving in the right direction,
helping to control inflation without undermining economic growth. The increase in
the CPI is also considered consistent with market trends and aligns with the government’s
goal of keeping inflation under 4 per cent.

Experts noted that a ten-month CPI increase of just 3.27 per cent reflects
close coordination between fiscal and monetary policies. The MoF controls public
spending and reasonably manages prices on essential goods, while the State Bank
of Vietnam proactively loosens credit in a controlled manner, supporting business
recovery without creating inflationary pressure.

Certain factors may cause slight price increases in the final two months of
2025, such as rising year-end consumer demand, adjustments to tuition and public
service fees, and global energy price fluctuations. However, with a stable macro-economic
foundation and flexible policy tools, the likelihood of inflation exceeding 4.5
per cent is rather low.

Analysts emphasized the importance of stabilizing inflation expectations and
avoiding “panic” price adjustments. Transparency in the supply and demand of fuel,
food, gold, and foreign currency is also necessary to maintain market confidence.

The CPI increase in the first ten months clearly demonstrates that inflation
in Vietnam is well-controlled despite global uncertainties. This outcome is not
only the result of sound economic policies but also a key foundation for maintaining
high growth, stabilizing living standards, and reinforcing confidence in the government’s
management capacity.

Inflation under control

Vietnam’s inflation has remained stable even as fiscal and monetary policies
have been loosened to support growth. As of the end of September, money supply was
estimated to have risen 8.5 per cent, with credit up 13.4 per cent since the beginning
of the year. However, the velocity of money stood at just 0.65-times, well below
the usual 0.9 to 1.0-times.

Dr. Can Van Luc, Chief Economist at the Bank for Investment and Development
of Vietnam (BIDV), attributed this mainly to a slowdown in money circulation. “Though
more money is being injected into the economy, it is not circulating strongly, with
bottlenecks in areas such as public investment and private sector capital flows,”
he explained. “As a result, inflation did not surge.” Another key factor was tight
control over essential goods like food, fuel, and electricity, along with ensuring
ample supply.

According to the NSO, the positive results in inflation control are due to
ministries, agencies, and local authorities aggressively implementing coordinated
measures to manage prices and balance supply and demand, especially in essential
goods, as directed by the government. Supportive policies, such as a 2 per cent
reduction in VAT, cuts in fees and charges, and lower import tariffs on many goods,
have also been maintained.

Local governments have actively promoted industrial programs, supported small
and medium-sized enterprises, boosted production and business, and improved the
investment environment. Experts believe these measures leave space to keep annual
inflation below the National Assembly (NA) target.

Dr. Luc added that inflation is not a major concern for 2025. The annual average
CPI is forecast at 3.8-4 per cent – under the NA target – thanks to sufficient supply
of essential goods and services, stable exchange rates and interest rates, and close
coordination between fiscal and monetary policies. Still, inflationary pressure
may rise in the final quarter of the year due to cost-push and demand-pull factors.

Cost-push pressures include higher import prices stemming from US tariffs and
increases in State-managed goods, while demand-pull pressures may come from credit
growth to meet higher capital needs. Authorities also need to ensure adequate supply
of essential goods during floods and natural disasters to stabilize prices.

Economists caution that authorities cannot be complacent. From now until year’s-end,
food and dining-out prices could continue rising in flood-affected areas, particularly
vegetables and processed food. Vietnam’s economy remains exposed to external factors,
such as energy prices, exchange rates, and monetary policy changes in major economies,
requiring careful monitoring and flexible policy adjustments.

Public investment disbursement pressure is also increasing, with nearly VND1,000
trillion ($38.5 billion) targeted for full allocation in 2025. Implementing market-based
pricing for State-managed services must be carefully managed to balance CPI trends
with development and social stability goals.

The government issued Resolution No. 86/NQ-CP on November 4, outlining key
tasks for the closing months of the year and emphasizing continued inflation control,
macro-economic stability, growth promotion, and the maintenance of major economic
balances. Credit will be directed towards production, priority sectors, and growth
drivers, while the gold, stock, bond, and real estate markets will be closely managed.

VET-Song Ha