Vietnam Holds 2026 Inflation Target at 4.5% Despite War Risks

Vietnam’s central bank will maintain its 2026 inflation target at 4.5% even as price pressures from the Iran war mount, Governor Pham Duc An said in an interview. Inflation rose 5.46% yoy in April, driven by an 11.1% surge in transport costs. Duc An noted that the global economic landscape remains “complex and unpredictable,” with geopolitical tensions complicating policy stance. The State Bank pledged to support production and business activity to help meet the government’s goal of double-digit growth over the next five years. Monetary policy will be managed flexibly, coordinated with fiscal measures to balance growth and stability. Further, authorities will rely on open market operations to ensure liquidity, steer credit toward productive sectors, and restrict lending to riskier areas. The board will also monitor market conditions closely, adjusting rates as needed while maintaining a balance between credit expansion and capital mobilisation.

Vietnam’s annual inflation rate accelerated to 5.46% in April 2026 from 4.65% in March, marking the highest level since January 2020, driven by higher domestic gas prices in line with rising global oil prices. Upward price pressures were broad-based across most components, including food (5.20% vs 4.72% in March); beverages and tobacco (4.21% vs 3.44%); clothing, hats, and footwear (2.29% vs 1.82%); housing, electricity, water, fuel, and building materials (7.95% vs 5.88%); household equipment and goods (3.14% vs 2.44%); healthcare (1.11% vs 1.00%); transport (11.08% vs 10.81%); education (3.37% vs 3.30%); culture, entertainment, and tourism (2.71% vs 2.07%); and other goods and services (4.52% vs 4.01%). Meanwhile, the cost of communication rebounded (0.24% vs -0.07%). Core inflation rose to 4.66% in April from 3.96% previously. Core inflation accelerated to 4.66% in April, marking the fastest pace since March 2023. Monthly, CPI rose 0.84%, easing from a 1.23% rise in March.

Vietnam’s annual inflation rate accelerated to 4.65% in March 2026 from 3.35% in the previous month, marking the highest level since January 2023 and the fastest March year-on-year CPI increase in the past five years. Upward price pressures were broad-based across most components, including food (4.72% vs 5.28% in February), beverages and tobacco (3.44% vs 3.03%), clothing, hats, and footwear (1.82% vs 1.87%), housing electricity, water, fuel and building materials (5.88% vs 5.60%), household equipment and goods (2.44% vs 2.23%), healthcare (1.0% vs 0.74%), transport (10.81% vs -3.19%), education (3.30% vs 3.21%), culture, entertainment and tourism (2.07% vs 2.31%), and other goods and services (4.01% vs 4.10%). At the same time, cost of communication remained broadly stable (-0.07% vs -0.24%). Core inflation rose to 3.96% in March from the prior 3.74%. On a monthly basis, consumer prices increased 1.23%, after 1.14% gain in February, the steepest pace since February 2021.