Upside risks are present, with a possible boost from the front-loading of orders driven by US tariff fears.
Manufacturing fundamentals remain strong. Vietnam is a hub for assembly, packaging, and testing for semiconductor chips, and the chip-led tailwind will continue next year, though the boost will be weaker than in 2024. “We expect some softness in the near-term,” Oxford Economics said in a recent research briefing on the country.
Vietnam’s economy will be the stand out among the ASEAN-6, growing at a faster pace relative to its peers during the next few years, according to Oxford Economics, which thinks growth next year will be 6.5 per cent YoY led by manufacturing, with contributions from machinery and textiles.
The domestic sector outlook remains bright and manufacturing fundamentals remain strong, it observed.
The domestic sector outlook remains bright, and solid wage growth, driven by foreign direct investment (FDI) job creation, should support private consumption, it noted.
With the number of operating enterprises still growing in annual terms, asset accumulation will likely be stronger in 2025, though FDI inflows may see a temporary slowdown in early 2025 while awaiting possible US tariff announcements on Vietnam.
Oxford Economics feels credit growth in Vietnam should be better next year. Recent changes to credit controls and a better domestic business sector should provide some support to credit growth. However, the drag from real estate will likely last until end-2025, and offloading bad debt will take some time.
While economic activity has recovered, currency pressures next year may drag inter-bank rates upwards. Combined with deposit growth being weaker than credit growth, financial conditions may be tighter. This has the potential to slow the recovery in consumption, as well as the domestic business sector, the research organisation added.
Fibre2Fashion News Desk (DS)
