Vietnam’s economic outlook for 2025 is highly positive, building upon the strong momentum from an impressive 2024. The country’s robust export performance, marked by ten consecutive months of growth, is expected to continue, provided global trade remains stable and free from disruptions, such as potential tariff policies from the U.S. Exports play a crucial role in Vietnam’s economy, with their value nearly equivalent to the nation’s GDP in 2024.
Mr. Suan Teck Kin, Head of Research and Executive Director, Global Economics and Markets Research, at UOB
Key drivers of growth in 2025 include sustained trade expansion, increased foreign direct investment (FDI), and continued government investment in infrastructure. As trade expands, both FDI and domestic investment are likely to grow, with foreign businesses viewing Vietnam as an attractive investment destination and domestic companies seizing opportunities created by the influx of foreign capital. Government investment in infrastructure is essential for improving Vietnam’s competitiveness, productivity, and overall attractiveness as a business hub.
Free Trade Agreements (FTAs) are crucial for Vietnam, given its high exposure to trade, with the second-highest trade-to-GDP ratio in Southeast Asia, following Singapore. These FTAs facilitate trade and help Vietnam diversify its export markets, reducing reliance on any single economy and mitigating risks associated with economic disruptions in key markets like the U.S. Additionally, FTAs make Vietnam a more attractive destination for foreign investment by providing investors with easier access to both Vietnam’s domestic market and its FTA partner markets.
However, Vietnam’s significant reliance on the U.S. as an export market makes it vulnerable to changes in U.S. trade policies. Protectionist measures, such as increased tariffs, could make Vietnamese goods more expensive and less competitive. To mitigate these risks, Vietnam should prioritize export market diversification, reducing the share of exports to the U.S. and expanding into other markets.
In summary, Vietnam’s economic prospects for 2025 are highly positive, driven by robust export performance, increased investment, and strategic government initiatives. By leveraging FTAs and diversifying export markets, Vietnam can enhance its economic resilience and continue on a path of sustainable growth.
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