VIETNAM ECONOMIC NEWS RECAP - JANUARY 2025

Vietnam’s economy in early 2025 shows a cautious start. The World Bank’s upward revision of Vietnam’s GDP growth to 6.6% underscores positive expectations, but January’s figures point to a slow buildup. FDI inflows showed mixed performance, with a decline in newly-registered capital, in contrast to a surge in capital adjustments and share acquisitions. Meanwhile, the country’s manufacturing sector, as indicated by January’s PMI, continues to face challenges from slow external demand and ongoing global trade uncertainties.

Global trade dynamics are shifting as Donald Trump resumes the U.S. presidency, reviving protectionist policies to reduce the trade deficit. Possible tariffs on Vietnamese goods are expected to impact export volumes and drive up production costs. The electronics sector, a key driver of Vietnam’s exports, is particularly vulnerable, with new tariffs threatening to raise costs and reduce competitiveness. To remain resilient, the industry needs improvement in infrastructure, sourcing diversification, and technology application to meet global demand and mitigate external risks.

In response, Vietnam is preparing countermeasures, focusing on leveraging free trade agreements, diversifying trading markets, and enhancing compliance with international trade standards. Vietnam posted a USD35 billion trade surplus with the EU in 2024 under the EVFTA, reflecting the positive impact of the agreement after four years in effect. Moving forward, Vietnam’s ability to remain competitive in this new environment will depend on strategic adaptation, maintaining resilience through domestic business environment improvement, policy innovation, strengthened supply chains, and deeper global integration.

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