Vietnam’s 2025 Economic Outlook: A Note from Vietcetera's CEO, A Business Owner’s Take
By Hao Tran
I recently had the chance to review VinaCapital’s latest macroeconomic update by Chief Economist Michael Kokalari about Vietnam’s 2025 outlook.
Overall, I agree with their broad view: while the next year could bring some headwinds, Vietnam remains better positioned than many other emerging markets. Growth may slow a bit, but the country’s fundamentals are strong, and with the right government moves — especially on infrastructure and public investment — I believe Vietnam will continue to outperform its peers.
With that said, outperforming is a huge positive, but is not an indicator that we should disregard other possible shortcomings that we should look out for and can still influence.
Tarrifs May Cause Slowdown
VinaCapital outlines a base case where 20% U.S. tariffs will hit a wide range of Vietnam’s non-tech exports by mid-2025. If that plays out, it would likely shave about 2–3% off GDP growth, mostly impacting sectors like furniture, apparel, and footwear. Electronics, they note, should remain resilient, and broader foreign direct investment trends still look positive.
Their point that Vietnam has plenty of policy tools — low public debt, room for rate cuts, and ongoing infrastructure programs — makes a lot of sense. The country is in a strong position to stimulate domestic demand if exports take a hit. That’s a major difference from some neighboring markets, where governments are more constrained in what they can do.
Where I would add some perspective is around local consumer confidence. From my experience operating businesses here, I’ve seen how global shocks can take a little time to filter through the economy.
Typically, it’s about a six-month lag. After the first round of U.S. tariffs on China back in 2018, it wasn’t immediate — but six months later, you could feel U.S. consumer sentiment dip, and that ripple effect eventually reached manufacturing, then services, then broader local consumption.
I remember a view point in late 2024, from one of our clients in the mobility sector, commenting that while 2023 was a challenging year, 2024’s trends pointed toward a robust 2025 due to the increased investment from companies in the supply chain - buying more of their tires.
It’s fair to say that my client is likely revising projections due to the tariff situation.
My view isn’t that this will derail Vietnam’s growth story — far from it. It’s just something to keep an eye on. Even if Vietnam isn’t directly hit across all sectors, if U.S. consumers pull back generally, it will still trickle into Vietnamese exports and eventually into local businesses. A bit less overtime pay at factories, slightly fewer new jobs, maybe a bit more caution among consumers — small shifts that add up.
Future-Proofing The Vietnamese Economy
That said, the main difference now is how proactive the Vietnamese government is being. Infrastructure investments are already ramping up — not just in major cities, but across provinces.
New highways, airports, and logistics hubs are getting funded, and this kind of spending tends to be one of the fastest ways to stimulate domestic demand. When workers get paid to build roads and ports, when suppliers win new contracts, when new industrial zones come online — that money circulates fast into the broader economy.
In fact, I think infrastructure investment could end up offsetting a good chunk of the slowdown in exports. It won’t be perfect — external demand still matters — but if the government stays aggressive, it could cushion a lot of the short-term volatility. And over the longer term, these projects improve Vietnam’s competitiveness even more, helping attract the next wave of FDI.
Another positive is Vietnam’s continued move up the value chain. Manufacturing isn’t just about low-cost assembly anymore. Companies are investing in automation, smart logistics, AI-driven operations — and Vietnam is positioning itself well to capture that trend. The government’s push into AI and digital transformation also gives me confidence that we’ll see more resilience across industries, even if traditional export sectors face bumps.
It’s also worth noting that Vietnam has deepened its trade ties with Europe, Japan, South Korea, and Australia. These partnerships are starting to show real results and should help diversify demand over time, reducing the country’s reliance on the U.S. market.
Lastly, one area that stands out to me is tourism. In 2023, Vietnam welcomed 12.6 million international visitors, a significant rebound from previous years. However, this figure still lags behind Thailand’s 28 million arrivals in the same year . This gap indicates a substantial opportunity for growth.
Recent visa relaxations are a positive step. Expanding visa-free access to countries like the U.S., Australia, and Canada could further boost tourist numbers. Internal research by Vietcetera suggests that aligning Vietnam’s visa policies with those of Thailand could potentially double tourism revenue over the medium term, providing a significant boost to the economy.
Beyond tourism, the government’s commitment to infrastructure development is encouraging. Investments in transportation, energy, and digital infrastructure not only create jobs but also enhance Vietnam’s attractiveness to foreign investors.
While external challenges like U.S. tariffs may impact certain sectors, Vietnam’s diversified economy, growing middle class, and strategic investments position it well for sustained growth. As a business owner, I remain optimistic about the country’s prospects and the opportunities that lie ahead.
Flexibility Is Key
Overall, while 2025 may come with more uncertainty than we expected a few years ago, I’m optimistic. Vietnam has been through plenty of cycles before, and each time, it’s come out stronger. Growth might moderate, but we’re still looking at 4–5% GDP expansion at a minimum — which would be an impressive performance compared to many other emerging markets facing similar external shocks.
For local business operators like myself, I think the key is to stay flexible. Watch U.S. consumer trends, pay attention to hiring trends at factories, and monitor how quickly infrastructure projects get delivered, not just announced. But there’s no need to be overly cautious either.
The fundamentals are there. The government is moving. Domestic demand has a lot of underlying momentum. If anything, I think the next 12–18 months could set the foundation for Vietnam to take even bigger steps forward once global conditions stabilize.
Vietnam’s story remains strong. The next phase will just require a bit more patience, sharper execution — and the same resilience that’s gotten us here in the first place.