Vietnam's inflation forecast to hit 4-4.5% this year

The primary causes are pressures from soaring global energy and food prices, coupled with the impact of Typhoon Yagi, which has significantly increased domestic production costs and consumer prices.

The report highlights that Vietnam's economy showed positive signs of recovery in the first nine months of 2024.

State budget revenue reached VND1.45 quadrillion (US$57 billion), up 17.9% year-on-year, driven by a strong rebound in trade and domestic economic activities.

However, development investment spending declined by 11.8% due to slow public investment disbursement in the first half of the year. Despite this, the state budget maintained a surplus of nearly VND192 trillion, reflecting effective public financial management.

While achieving significant progress, Vietnam's economy in 2024 still faces risks from exchange rate volatility, global political uncertainties and potential declines in domestic consumption, which could substantially impact growth rates.

In an October report, the Ministry of Finance outlined two inflation scenarios for 2024, based on a target of keeping the Consumer Price Index (CPI) within 4% to 4.5%.

In the first scenario, CPI is expected to rise by around 3.7% compared to 2023. This low-inflation scenario reflects economic stability amid minimal fluctuations in energy and food prices.

In another scenario, CPI may increase to about 3.92% if significant adjustments are made in public service prices, including healthcare, education and electricity. This scenario reflects pressure from production and consumption cost factors.

The report also indicates that domestic market prices tend to spike during the Lunar New Year period before stabilising in subsequent months.

The Ministry of Finance has called on sectors and localities to implement comprehensive measures to control inflation, including market monitoring, price management, monetary policy regulation and transportation cost control.

The government will continue deploying flexible solutions to manage prices, including adjusting public service fees, improving production cost efficiency and boosting goods circulation.