Vietnam’s Financial Markets 2023 and Outlook for 2024

Macroeconomic Resilience in a Challenging Year

Despite global headwinds in 2023, including high inflation, tighter monetary policies, and geopolitical tensions, Vietnam’s economy demonstrated resilience. According to the Asian Development Bank (ADB), GDP growth reached 5.05%, down from 8.12% in 2022 but still notable compared to many regional peers . Inflation averaged 3.25%, below the 4% target, as proactive policy easing by the State Bank of Vietnam (SBV) lowered refinancing and rediscount rates by a total of 1.5 percentage points .

Trade declined for much of 2023 but showed signs of recovery in the final quarter, and exchange rate stability was largely maintained, with the dong depreciating only 2.6%, far less than many emerging markets . The balance of payments returned to a surplus of $5.6 billion, driven by a strong current account.

Banking, Credit, and Capital Markets

Credit growth slowed to its lowest average rate since 2013 at 10.5%, despite ending the year at 13.78% . The financial system faced rising non-performing loans and weaker profitability, but lower interest rates improved liquidity. Meanwhile, capital mobilization rebounded. The securities market, which slumped in 2022, recovered in 2023 with bond issuance and IPO activity helping to raise VND 420 trillion, increasing its share of social investment capital to 12.4% .

The stock market gained 12.2%, buoyed by easing monetary conditions and investor optimism . Ambitious regulatory plans aim to upgrade Vietnam’s stock market to emerging market status by 2025, which could attract billions in foreign capital. Key milestones include launching the KRX trading platform and relaxing foreign ownership limits .

Interest Rates, Currency, and Gold

SBV’s decisive liquidity injections and rate cuts supported lower interbank, deposit, and lending rates . Deposit and lending rates fell 2–3 percentage points over the year, though lending rates adjusted more slowly. Looking ahead, rates are expected to stay low through most of 2024, with only modest hikes if exchange rate pressures intensify.

The dollar–dong exchange rate moved sideways in early 2023 before climbing about 3% in the second half as the US Federal Reserve maintained high rates . Some gold market volatility persisted, with domestic–international price gaps influencing dollar demand.

2024 Outlook: Opportunities and Risks

ADB forecasts GDP growth of 6.0–6.5% in 2024 under its baseline scenario, with inflation rising slightly to 3.4–3.8% . Stronger domestic demand, new investment from global supply chain shifts, digital transformation, and green finance will be key drivers. Policy reforms—including new laws on land, housing, and credit institutions—should improve the investment climate.

The financial sector is expected to benefit from recovering credit demand, improving asset quality, and expanding fintech adoption. However, risks remain: global economic uncertainty, structural issues in real estate and corporate bonds, and stricter global tax and trade measures could weigh on growth.

Fintech and Green Finance on the Rise

Digital banking and fintech continued to expand, with most transactions now available online . The report emphasizes the need for clearer regulatory frameworks, including sandboxes and AI applications, to strengthen innovation while managing risks. Green finance also gained traction, with total outstanding green credit rising steadily as ESG principles become mainstream.

Download the Full Report

For a detailed analysis, charts, and policy recommendations, download the full “Vietnam’s Financial Markets 2023 and Outlook 2024” report for free from the Asian Development Bank.