Interest rates expected to decrease by 0.7 percentage points next year

Economist Nguyễn Xuân Thành, a lecturer at the Fulbright School of Public Policy and Management, said as the US Federal Reserve (Fed) and many central banks had entered a cycle of cutting interest rates, Việt Nam would continue to maintain a loose monetary policy to support growth next year. He expects the State Bank of Vietnam (SBV) will cut its policy interest rate by 0.7 percentage points next year.

A customer deposits at a HDBank’s transaction office in Hà Nội. Việt Nam will continue to maintain a loose monetary policy to support growth next year. Photo cafef.vn

Trần Ngọc Báu, general director of financial market research company WiGroup, also believes that in 2025, Việt Nam will have a lot of room for easing monetary policies when inflation and exchange rates ease. Regardless of whether the US has a hard or soft landing, the global trend is for easing rates and Việt Nam will benefit from the trend.

There is still room for monetary policy to support growth, experts say.

Nguyễn Bá Hùng, chief economist of ADB in Việt Nam, said that the two drivers of Việt Nam’s economic recovery after Typhoon Yagi should be insurance and the budget, while promoting public investment in post-disaster infrastructure and supporting recovery in agriculture, including seeds and production materials.

Though the SBV continues to pursue a supportive monetary policy, the room to implement this policy has been significantly limited, according to Hùng. Therefore, it is necessary to support fiscal policy measures, increase public investment disbursement and further reform State management to reduce the burden on the economy.

Regarding fiscal policy, Thành said purchasing power in the domestic market was very low, so inflationary pressure was no longer a concern. He forecast that the controlled inflation rate in 2024 would be around 3 per cent, much lower than the target of 4 to 4.5 per cent, which would help further loosen fiscal policy.

Thành forecast budget revenue would still increase, with a total estimated State budget revenue of VNĐ1.96 quadrillion, up 15.6 per cent, while the budget deficit would be VNĐ471.5 trillion.

The Government would boost public investment with its expected capital plan reaching VNĐ791 trillion, up 16.5 per cent compared to the 2024 plan, Thành said.