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Vietnam entered 2025 with strong momentum: Q1 GDP growth reached 6.9%, the highest in five years, supported by solid manufacturing and exports. Inflation stayed manageable at 3.1%. However, new volatility emerged as the Trump campaign proposed a “reciprocal” 46% tariff on Vietnamese goods. While headlines stir concerns, we see a more measured path ahead.
๐ข๐๐ฟ ๐ฏ๐ฎ๐๐ฒ ๐ฐ๐ฎ๐๐ฒ: ๐ฎ๐ฌโ๐ฏ๐ฌ% ๐๐ฎ๐ฟ๐ถ๐ณ๐ณ
We view the 46% tariff as unlikely to materialize. Harvard estimates only 16% of Vietnamโs exports involve Chinese transshipment. Diplomatic efforts are already underway, and Vietnam’s strategic importance to the U.S. supply chain strengthens its negotiating position. A 20โ30% tariff is a more realistic outcome, with Vietnam preparing fiscal and monetary measures to cushion impacts. Under this base case, we adjust our 2025 GDP growth forecast from 7.4% to 6.3%.
๐๐ถ๐๐ฒ๐ฟ๐๐ถ๐ณ๐๐ถ๐ป๐ด ๐๐ต๐ฒ ๐ด๐ฟ๐ผ๐๐๐ต ๐บ๐ผ๐ฑ๐ฒ๐น
Vietnam is not merely reacting to global trade uncertaintyโitโs evolving structurally. The government is fast-tracking infrastructure investments to shift from export-led growth to domestic demand. With gross capital formation at 31.7% of GDP, there is significant room for expansion. Lower logistics costs and stronger domestic consumption will drive the next phase of sustainable growth.
๐๐ป๐ฐ๐ฟ๐ฒ๐ฑ๐ถ๐ฏ๐น๐ฒ ๐ผ๐ฝ๐ฝ๐ผ๐ฟ๐๐๐ป๐ถ๐๐ถ๐ฒ๐ ๐ถ๐ป ๐ฒ๐พ๐๐ถ๐๐ ๐บ๐ฎ๐ฟ๐ธ๐ฒ๐
The VN-Index, the gauge of Vietnam stock market delivered a total return of 2.9% in USD in the first quarter of 2025. However, volatility heightened since the announcement of “reciprocal” tariff as 80% of the daily trading volume is retail investors. Forward P/E stands at just 9.9x, near five-year lows. Most listed firms are tied to domestic themes, not exports. With disciplined stock selection focused on strong balance sheets and resilient cash flow, investors can find compelling opportunities amid the noise.
At TIM, we believe this is a time to stay selective, stay disciplined, and lean into opportunities with conviction.
Watch our video recap of key takeaways of the outlook
