In Vietnam, while income indicators have improved, many households report little change in their perceived standard of living. Despite increases in wages and business income, rising costs for food, utilities, education, and loan repayments have limited households' financial comfort.
On July 29, local media outlet VnExpress reported, citing the General Statistics Office of Vietnam, that the average monthly income for Vietnamese people last year was 6 million dong (approximately $250), a 10.9% increase from 2024. In urban areas, the average monthly income per person reached about 7.4 million dong (around $315), marking a 6.7% rise and 1.42 times higher than in rural regions.
Worker incomes also showed an upward trend. According to the Ministry of Labor, Invalids and Social Affairs, the average monthly income for workers was 9 million dong (approximately $380), an increase of 717,000 dong compared to the same period last year. A report from Sun Life Financial Group indicated that 22% of Vietnamese respondents felt financially stable, nearly double the average across six surveyed markets.
Rising Living Costs Outpace Income Growth, Eroding Disposable Income
Despite income growth, many individuals do not feel an improvement in their living standards. A 29-year-old office worker, referred to as B, reported a 15% increase in income this year due to taking on additional work, but most of it went toward higher transportation costs. He stated, “I took on extra work to increase my income, but right now, I can only maintain a stable lifestyle and my travel hobby; I am not any better off.”
A 30-year-old resident of District 2 in Ho Chi Minh City, referred to as A, shared a similar experience. He noted that while his family's income increased by 20-30% this year due to a stable online business, “the overall standard of living has not changed significantly.” He explained, “Prices for groceries, electricity, water, and children's tuition have all risen, so I have to be more careful with my spending than before.”
The burden of rising prices is affecting households across the board. According to the Sun Life report, 84% of Vietnamese respondents said inflation has made it more difficult to manage monthly expenses. Food, utility bills, and fuel costs impacted about 96% of consumers, and medical expenses remained a significant burden. B also mentioned, “After recent fluctuations in gasoline prices, the cost of lunch at the office rose from 35,000 dong to 40,000 dong.” The average consumer price index for the first half of this year increased by 4.38% compared to the same period last year. Housing, electricity, water, fuel, and construction materials saw the largest increase at 6.72%, while transportation rose by 5.23% and food and dining services by 4.79%.
Household Debt Burden Compounds Financial Strain
In addition to living costs, the burden of loan repayments is also cited as a factor reducing households' financial capacity. According to Mirae Asset Vietnam, newly incurred non-performing loans at listed banks reached approximately 53.4 trillion dong in the first quarter of this year, a 23.2% increase from the fourth quarter of last year. The rise in new non-performing loans coincided with an upward trend in loan interest rates.
As spending pressures mount, there is a noticeable trend of reduced savings. In the Sun Life survey, 33% of respondents indicated plans to withdraw savings for consumption, the highest rate among the surveyed markets. Additionally, 23% reported cutting back or skipping essential expenses, while 12% had temporarily halted contributions to retirement or savings funds.
Long-term financial plans are also being disrupted. According to a report by Tien Viet Securities on the financial health and investment confidence of Vietnamese people this year, the primary long-term goals for households are healthcare and children's education, accounting for 48% and 47%, respectively. However, only 27% of surveyed investors had a clear long-term financial plan for themselves and their families, while the remaining 73% had either not started or lacked specific goals and actionable plans.
Online reactions reflect the palpable sense of financial strain. One user commented, “Prices for consumer goods have already risen before incomes went up,” referencing increases in gasoline and food prices. Another noted, “When salaries increase by one unit, electricity, water, and children's education costs rise by 5-10% each year.” A different comment highlighted that living costs have significantly increased compared to a few years ago, citing higher vegetable prices in markets.
Meanwhile, the Vietnamese government has emphasized the need for price management. Earlier this month, following a six-month review meeting of the Price Management Operation Committee, Deputy Prime Minister Nguyen Van Thang urged ministries, agencies, and local governments to effectively control price levels for the remainder of the year. He also called for closer monitoring of factors contributing to price pressures and strengthening early warning systems.
* This article has been translated by AI.
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