Having been a very populated developing country over the last 30 years, Vietnam has had to recover from the damages of war and the loss of financial support from the old Soviet Bloc. Vietnamese authorities have renounced their commitment to economic liberalization and international integration. They have moved to put into practice the structural reforms needed to modernize the economy and to produce more competitive export-driven industries.

Vietnam joined the WTO in January 2007 following more than a decade-long negotiation process. WTO membership has provided Vietnam an anchor to the global market and reinforced the domestic economic reform process.

The global recession has hurt Vietnam's export-oriented economy with GDP growing less than the 7 percent per annum average achieved during the last decade. In 2009 exports fell nearly 10 percent year-on-year, prompting the government to consider adjustments to tariffs to limit the trade deficit. The government has used stimulus spending, including a subsidized lending program, to help the economy through the global financial crisis, and foreign donors have pledged $8 billion in new development assistance for 2010. Domestic investment grew 16 percent while committed foreign direct investment fell 70 percent, a steep reduction after 5 years of growth.

Nevertheless, the weaker economy, current account deficit, and subdued foreign investment environment means Vietnam's managed currency, the dong, faced downward pressure through 2009, leading the government to devalue it by more than 5 percent in December.

Inflation in 2008 was highest in 16 years, reaching 24 percent, the 5th highest in Asia. It has since decreased to 7 percent in 2009, its lowest rate since 2003. The predictions for 2010 range from 6 percent as indicated by JPMorgan to 11 percent predicted by Citigroup. World Bank forecasts the inflation at 9 percent this year, while last month, Vietnam’s government raised its inflation target for 2010 by 1 percent to 8 percent on concerns economic growth will push up prices. The nation is aiming for a gross domestic product growth rate of 6.5 percent this year, higher than the 5.3 percent increase in 2009.

According to figures from the General Statistics Office in Hanoi, the inflation rate fell for a second month in May to 9.05 percent from 9.23 percent in April, because of slower growth in food prices, largely due to the price of rice. Evidence that inflation may slow further would give the government room to renew appeals for banks to revive lending by cutting interest rates. State Bank of Vietnam Deputy Governor Nguyen Van Binh told a World Economic Forum conference in Ho Chi Minh City on June 6 that the Central Bank will try to ease rates at the government’s request.