VMAP: An Extended Hybrid Quarterly Projection Model for Viet Nam

The State Bank of Vietnam pursues price stability and sustainable economic growth through a combination of interest rate policy, exchange rate management, and credit guidance. Assessing these instruments requires a framework that captures their interactions with fiscal policy and the transmission of domestic and external shocks. This paper develops VMAP, a hybrid Macroeconomic Analysis and Projection model for Viet Nam, extending earlier semi-structural models to integrate these policies within a unified framework. The model combines a theory-based structure with empirically estimated dynamics, using Bayesian methods and system priors informed by Vietnamese evidence. Estimation draws on nineteen observables over 2010Q1–2025Q4. In recursive forecasting exercises initialized from one-sided filtered states, VMAP outperforms a random walk across most variable–horizon pairs, with statistically significant gains for inflation, the policy rate, credit growth, and the exchange rate. These results support its use as a framework for macroeconomic forecasting, policy analysis, and scenario assessment in Vietnam.