Vietnam October 2025 Outlook – Economic Growth Accelerates

We would like to present you our monthly Macroeconomic & Stock Market Highlights for Vietnam alongside with the monthly performance update of the TIM Vietnam Actively Managed Certificate for October 2025.

Watch our video recap of key takeaways of the Vietnam Marcroeconomic and Stock market in October 2025

Vietnam’s Update – Economy

• Vietnam entered the final quarter of 2025 with a series of high-level diplomatic engagements. At the ASEAN Summit in Malaysia, Vietnam and the United States issued a joint statement on a Framework for an Agreement on Reciprocal, Fair, and Balanced Trade. Under the framework, Vietnam will provide preferential market access for US industrial and agricultural exports to Vietnam, while the U.S. will offer zero tariffs on some selected products. Details on which products will be determined later. Shortly after, Vietnam upgraded its relations with the United Kingdom to a Comprehensive Strategic Partnership, paving the way for deeper cooperation in finance, renewable energy, education, and infrastructure. These diplomatic advances highlight Vietnam’s proactive foreign policy and its commitment to maintaining stable trade relations while deepening capital market development to attract long-term investment.
• Vietnam’s manufacturing sector had a solid expansion in October, with the PMI rose to 54.5 from the 50.4 of last month. A sharp and accelerated increase in output and new orders has strengthened business conditions. The re-expansion of employment and a renewed rise in stocks of purchases signal optimism on export activities going forward. In the first ten months of 2025, exports and imports grew by 16.2% y/y and 18.6% y/y, respectively, driven primarily by electronic products—consistent with the improvement highlighted in the PMI report. The trade surplus continued to expand to USD 19.6 billion.
• Retail sales rose 9.3% y/y in 10M/2025. Although tourist arrivals continued to grow strongly, up 21.5% y/y, spending activities were partly affected by several storms in October. On the domestic front, the government introduced further stimulus measures by rising personal income tax deductions, allowing around two million individuals to be exempted from income tax. This policy is expected to enhance household disposable income and provide additional support for consumer spending in the months ahead. The move comes as the State budget recorded a surplus of nearly USD 12 billion in the first 10 months of 2025, reflecting solid fiscal policy and ongoing streamlining of government spending.
• Inflation eased to 3.2% in October, mainly due to lower transportation costs following declines in used car and gasoline prices. The key contributors to price gains were housing and construction materials as well as food and foodstuffs. The first item rose on higher construction material costs amid tight supply and strong infrastructure activity, alongside an increase in rental prices. Meanwhile, food inflation picked up due to the new tax policy on household businesses effective from July 1, and recent storms in northern and central Vietnam that disrupted agricultural production, temporarily pushing up daily food prices.
• FDI disbursements totaled USD 21.3 billion (+8.8% y/y) in 10M/2025. Discussions with local industrial park developers suggest an uptick in site visit activities, particularly from Chinese tenants exploring expansion opportunities. Meanwhile, international developers such as Thailand’s Amata and Singapore-backed VSIP are proposing new industrial park projects in Vietnam, underscoring the continued resilience of FDI demand and sustained investor confidence in the country’s manufacturing outlook.
• Interest rates in Vietnam have started to normalize after an extended period of exceptionally low levels. Commercial banks raised deposit rates by 50-100 basis points in recent weeks, with the 12-month tenor now at around 5.5%. We view this as a necessary adjustment, as credit growth has continued to outpace deposit inflows while household savings are being drawn to alternative assets such as gold, USD, and real estate. While some may worry that higher funding costs could weigh on growth and corporate earnings, authorities are advancing the development of the corporate bond market as a complementary funding avenue. A key step is the requirement that all public bond issuances carry a credit rating—an important
  move to strengthen investor confidence and rebuild trust following the overheated market cycle in 2022. Currently, Vietnam has five licensed domestic credit rating agencies in which two have the stake of S&P Global and Moody’s.
• Higher interest rates are also expected to support the Vietnamese Dong (VND). In October, the official USD/VND rate appreciated by 0.4%, while the unofficial market recorded a sharper 4.6% rise, widening the spread between the two markets to around 6%. Authorities have stepped up measures to stabilize the currency. In the interbank market, the interest rate differential between VND and USD expanded across all tenors, with the overnight gap increasing to 1.5% from 0.6% at end-September. Concurrently, the government’s tighter oversight of speculative trading in gold and the informal USD market should help narrow the onshore-offshore gap. Toward year-end, we expect the VND to remain under some pressure due to seasonally higher import demand. However, the pressure should be more contained than before, supported by the widening interest-rate differential and the continued weakness of the USD.

Vietnam’s Update – Stock Market

• The VN-Index fell 0.6% in October as investors took profit following the FTSE Russell’s announcement on October 8 to upgrade Vietnam to Emerging Market status — a classic “buy the rumor, sell the news” reaction. The correction was most evident in sectors that had rallied ahead of the news, particularly Financials. Market sentiment was also impacted by reports of rising deposit rates in the banking system, which contributed to a moderation in trading activity. Average daily trading value stood at USD 1.28 billion, slightly lower than previous months but still nearly double the level a year earlier. Foreign investors recorded net sales of USD 919 million during the month, largely reflecting profit-taking in financial sector to raise liquidity
  ahead of upcoming IPOs.
• Real Estate and Information Technology leading the gains while Financials was the main laggard. Real Estate (+3%) extended its uptrend, primarily supported by Vingroup-related companies. Their share price gains were driven by the launch of the project in Can Gio (Ho Chi Minh City). Nevertheless, we maintain a cautious view on the group given its high leverage. By end Q3/2025, its assets-to-equity ratio stood at 6.7x while 9M/2025 profit was derived from non-cash financial income.
• Information Technology (+10.7%) also advanced strongly, supported by FPT (+11.7%). The company’s 9M/2025 results remained resilient, with net profit rising 19.2% y/y, underpinned by a strong rebound in backlog as global IT demand recovered alongside easing macro uncertainty. FPT also secured several large-scale digitalization and automation contracts totaling USD 1.1 billion, enhancing revenue visibility.
• In contrast, Financials sector declined by 4.9% amid continued profit-taking although net profit increased by 34.2% y/y in Q3/2025.
• Listed companies posted strong earnings growth in Q3/2025. Aggregate net profit across the three exchanges rose 33.1% y/y. Although Financials and Vingroup-linked stocks continue to dominate market sentiment, Q3 earnings growth of other companies outpaced (+55.4% y/y) and the same trend extended to the nine-month period.

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