Vietnam's Soaring Inflation Erodes Household Savings, Curbs Consumer Spending

Despite modest wage growth, households across Vietnam are seeing their savings dwindle as surging prices for food, housing, and education force significant cutbacks in spending.

For many, income gains are being completely erased by the rising cost of living. Quynh Anh, a public relations employee in Ho Chi Minh City, received a 3.5% salary increase this year, bringing her monthly income to VND15 million (US$570). However, a 58% rent hike to VND3 million, combined with higher costs for food and utilities, has cut her monthly savings in half to just VND2-3 million, even after reducing expenditures on dining out and travel.

This pressure is widespread. Hong Anh, a product manager for a confectionery firm, reports that her family’s living expenses have climbed since last year, driven by a 10% increase in her children's tuition fees and a 15% rise in food and personal care product prices.

Official data from the National Statistics Office corroborates these experiences, showing the consumer price index (CPI) rose 4.31% year-on-year in the first five months of 2026. The steepest increase was in housing, utilities, fuel, and construction materials, which climbed 6.64%. Transportation costs followed with a 5.22% increase, reflecting higher global oil prices.

At traditional markets in HCMC, vendors report fish prices are 15-30% higher than a year ago, while beef is up approximately 10%. In response to input costs for transport, packaging, and ingredients rising by 10-30%, many city eateries have increased their prices by 5-20% this year.

This inflationary environment is altering consumer behavior. Thanh, a fishmonger at Ba Chieu Market in Gia Dinh Ward, noted a sharp drop in demand. "Customers used to buy a kilogram of fish, but now many buy only half a kilogram or less," she said. "Some of them go to multiple stalls to compare prices before deciding whether to buy."

A recent poll by sales management software provider iPOS.vn and Nestlé Professional found that 34.5% of respondents plan to cut spending on eating out this year, an increase from 31.1% a year ago. The proportion of consumers who dine out daily has fallen from 17.4% to 13.76%.

Retailers and producers are navigating this cautious consumer landscape. Ho Thi Hong Dao, marketing director at the Saigon Co.op supermarket chain, said consumers are becoming more wary of non-essential purchases, prompting retailers to offer promotions to stimulate demand and ease cost pressures. A major HCMC-based food producer noted that its production costs for confectionery, beverages, and seasonings have risen 5-15%, but it has refrained from raising prices for fear of damaging demand.

The HCMC Food and Foodstuff Association attributes rising input costs to global factors, stating that higher gas and fertilizer prices linked to the Middle East conflict have driven up the cost of plastic and aluminum packaging and agricultural commodities. The association estimates that 50-60% of inputs for food production have become more expensive.

Dr. Le Dat Chi, head of the finance faculty at the University of Economics Ho Chi Minh City, explained that Vietnam’s economic dependence on imports makes it susceptible to fluctuations in global energy and logistics costs, exchange rates, and geopolitical conditions. He added that even with tightened budgets, many families find saving difficult because prices for essentials like housing, food, and school fees are all rising simultaneously.