Macro Update – November 2025: BEYOND THE STORM – PATH TO STABILIZATION FOLLOWING RECENT DISRUPTIONS

Economic data for November 2025 reveals an increasingly divergent growth picture. Key drivers such as public investment and credit growth continued to be promoted. Conversely, export activities and retail sales decelerated as continuous storms and flooding over the past two months created headwinds for consumption, logistics, and general food supply chains, exerting short-term upward pressure on domestic food prices.

1.Retail sales momentum continued to moderate, falling below the 10-year trend: Total retail sales of consumer goods and services expanded by +7.15% YoY (Oct: +7.2% YoY) and contracted marginally by -0.01% MoM.

2.Export turnover for both domestic and FDI sectors recorded negative growth of 6.3% MoM and 7.3% MoM, respectively. Weakness was particularly pronounced in key export verticals such as electronics, mobile phones, seafood, agriculture, and textiles. Consequently, the trade surplus narrowed to just US$1.1bn in November, bringing the cumulative 11-month surplus to US$20.53bn.

3.Manufacturing PMI reached 53.5, while the Index of Industrial Production (IIP) rose 2.34% MoM and 10.76% YoY. Automotive manufacturing was a standout performer (11M25: +22% YoY). Despite logistical bottlenecks caused by severe weather, new orders and employment figures continued to improve. We expect manufacturing activity to accelerate further in 2026, supported by business confidence (per S&P Global surveys) reaching a 17-month high.

4.Total registered capital in the first 11 months reached US$33.7bn (+7.4% YoY), while disbursed capital stood at approximately US$23.6bn (+8.9% YoY). A key highlight was the 50.7% YoY surge in registered capital via capital contributions and share purchases, reflecting robust confidence from existing investors in Vietnam’s growth prospects for the coming year.

5.Disbursement reached VND553.25tn YTD (+39.2% YoY), fulfilling 60.6% of the Prime Minister’s target. Regarding the decisive year-end acceleration period (December 2025 and January 2026), we anticipate a strong push in disbursement following Prime Minister Pham Minh Chinh’s signing of Directive No. 237/CĐ-TTg on December 6, which aims to disburse the remaining VND360tn within the subsequent 55 days.

6.Headline inflation remains well-anchored below the government’s goal (2025 average CPI target of 4.5%). Specifically, the CPI rose 0.45% MoM and 3.58% YoY. Core CPI increased by 3.28% YoY, with the 11-month average CPI reaching 3.29% YoY.

7.As of late November, credit growth exceeded 16% YTD, whereas deposit growth reached only ~12%. Surging year-end credit demand exerted pressure on commercial bank liquidity which prompted an uptrend in deposit rates in Market 1, while interbank rates (Market 2) spiked in late November/early December, with the overnight rate approaching 8%.

8.Outlook for remaining 2025 and 2026: We project that deposit and lending rates will maintain an upward trajectory, though the magnitude and pace will depend on the SBV’s credit growth targets for 2026. Looking toward the ambitious double-digit GDP growth target for the 2026–2030 period, strict adherence to low inflation and FX stability may be deprioritized. Instead, monetary policy is likely to remain partially accommodative to stimulate consumption and facilitate investment flows.