Vietnam's inflation rate for 2024 has been reported at 3.63%, falling below the government’s target of 4 to 4.5%. This figure was disclosed by the General Statistics Office (GSO), which noted the Consumer Price Index (CPI) rose by 0.29% from November to December. The primary contributors to this inflation surge are food and restaurant services, which experienced a 4.03% increase compared to the previous year, accounting for 1.35 percentage points of the overall CPI.
Housing and utility costs also played a significant role, increasing by 5.2% and contributing 0.98 percentage points to inflation. The rise in these costs can be attributed to hikes in key services, including electricity prices, which went up 7.68%, house rent at 4.6%, and water supply rising by 8.33%. Other sectors showing growth included healthcare and medicine, with a 7.16% increase impacting inflation by 0.39 percentage points, followed by education at 5.37% (0.33 percentage points) and transportation at 0.76% (0.07 percentage points).
Interestingly, telecommunications and postal services were the only sectors reporting negative growth, declining by 0.76%, which slightly mitigated the overall CPI by 0.07 percentage points. Cumulatively, retail sales and service revenues reached VND 570.7 trillion ($22.5 billion) just for December, marking a significant 9.3% increase year-on-year. For the full year of 2024, the revenue totaled VND 6,391 trillion ($251.94 billion), equivalent to a 9% rise from the previous year.
This annual figure includes VND 4,921.7 trillion ($194.02 billion) from retail sales, reflecting an 8.3% increase year-on-year. The accommodation and restaurant services sector particularly thrived, showing growth at 12.9%, with tourism also seeing impressive expansion at 16%. These positive signs are underscored by the fact Vietnam welcomed 1.75 million foreign tourists just in December 2024 alone, showing growth of 27.4% compared to the same month last year.
To address the challenges posed by inflation and currency fluctuations, the State Bank of Vietnam has responded proactively. After the Vietnamese dong fell to record lows, the central bank's Deputy Governor Dao Minh Tu stated, "The central bank will closely monitor the market situation to manage exchange rates flexibly and appropriately, synchronously coordinating it with other monetary policy tools to control inflation and maintain macroeconomic stability." This pledge highlights the central bank’s commitment to stabilizing the economy amid fluctuative conditions.
Vietnam has witnessed substantial changes to its economic structure, with authorities increasingly recognizing the importance of stabilizing not just inflation, but also the exchange rate. The report from the GSO indicates the government is closely monitoring how inflation may affect consumer spending and overall confidence in the nation’s economy.
Looking forward, analysts are widely optimistic about Vietnam’s economic recovery potential, fueled by consistent demand for products and services alongside steady growth across various sectors. The encouraging retail sales and revenue figures are expected to support this positive sentiment as authorities continue to pursue strategies to promote both economic stability and growth.
While the inflation figure of 3.63% for 2024 suggests some success in controlling price levels, the central bank’s vigilant approach toward monetary policy will be pivotal. Maintaining inflation around the target range will be key as the country navigates future challenges and opportunities for economic expansion.
Overall, Vietnam's economy displays resilience with growth patterns indicating not just recovery, but potentially, sustainable advancement. With careful monitoring and proactive measures, the nation appears well-positioned to maintain this upward trend, even as external factors continue to pose challenges.