Vietnam's August Inflation Quickens as Exports Jump 26%, Trade Gap Narrows

Vietnam's consumer price inflation picked up pace in August, with the annual rate reaching 4.89%, up from 4.45% in July, according to the National Statistics Office. The acceleration was driven primarily by higher costs in transportation, housing, and food-related services.

On the trade front, exports climbed 26% year-on-year to $54.80 billion in August, while imports rose 37.9% to $54.91 billion. This left a monthly trade deficit of just $110 million, a sharp narrowing from recent months.

However, the cumulative picture for the first eight months of the year shows a record trade deficit of $20.46 billion. Exports during this period grew 22.4% to $374.84 billion, while imports expanded 35.3% to $395.30 billion.

The government is targeting economic growth of more than 10% this year, aiming to strengthen its role as a regional manufacturing hub. Yet, policymakers must balance this ambition against rising import bills, inflationary pressures, and a more uncertain global trade landscape.

That uncertainty has deepened since Washington imposed a 12.5% tariff on Vietnamese goods last month, citing concerns over forced labour in export supply chains—an allegation Hanoi has firmly rejected.

Despite these external headwinds, domestic economic activity remains robust. Industrial production grew 14.4% in August from a year earlier, nearly matching July's pace, while retail sales rose 14.9%, slightly up from the previous month.

Foreign direct investment inflows reached $17.3 billion in the January-August period, up 12% year-on-year and surpassing the $15.2 billion recorded in the first seven months.