VMAP: An Extended Hybrid Quarterly Projection Model for Viet Nam

Quang-Thanh Tran

No 205, Working Papers from Development and Policies Research Center (DEPOCEN), Vietnam

Abstract: 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.

Keywords: quarterly projection model; semi-structural model; hybrid monetary policy; credit guidance; managed exchange rate; fiscal policy; Bayesian estimation; system priors; Vietnam (search for similar items in EconPapers)
JEL-codes: E32 E37 E47 E52 E62 F41 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2026
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