Market Summary

Yield Movements

Between 2 June and 29 August, local currency (LCY) government bond yield curve in Viet Nam shifted upward across all maturities propelled by strong economic growth and relatively high inflation. In the second quarter (Q2) of 2025, Viet Nam's economy grew the fastest among its emerging East Asian peers, expanding 8.0% year-on- year (y-o-y) compared with 6.9% y-o-y in the previous quarter. Viet Nam also recorded the highest inflation rate among its regional peers despite moderating to 3.2% y-o-y in both August and July from 3.6% in June, but it remained within the government's ceiling of 4.5%.

Local Currency Bond Market Size and Issuance

Viet Nam's LCY bonds outstanding grew 8.2% quarter-on-quarter (q-o-q) to VND3,487.0 trillion at the end of June, supported by expansions across all bond segments. Corporate debt stock grew 13.6% q-o-q, driven by increased issuance from corporates and the growing participation of nonbank entities. Outstanding Treasury and other government bonds and central bank securities also recorded q-o-q growth of 3.5% and 77.2%, respectively, supported by fewer maturities during the quarter. Meanwhile, total LCY bond issuance declined 40.2% q-o-q to VND742.6 trillion in Q2 2025 on reduced debt sales from both the government and central bank.

Sustainable Bond Market

At the end of June, private sector financing continued to dominate Viet Nam's sustainable bond market, which comprises green and sustainability bonds. Green bonds accounted for 52.2% of the total sustainable debt stock while sustainability bonds accounted for 47.8%. In Q2 2025, outstanding sustainable bonds reached USD1.1 billion and were highly concentrated in tenors of 3 years and less. In terms of size, Viet Nam's sustainable bond market continued to lag behind its emerging East Asian peers, accounting for only 0.2% of the regional total.