(Dan Tri Newspaper) - Experts predict that 2025 could be a challenging year for the Vietnamese economy, with four main variables: exchange rates, exports and imports, the global geopolitical situation, and internal issues of the Vietnamese economy.
At the seminar "Investment 2025: Decoding Variables - Identifying Opportunities" organized by the Investment Newspaper on December 12th, economist Nguyen Tri Hieu, Director of the Institute for Research and Development of Global Financial and Real Estate Markets, presented important assessments of Vietnam's economic situation in 2024 and 2025. Mr. Hieu stated that 2024 will be a challenging year for Vietnam due to global geopolitical and economic fluctuations. "These factors have strongly impacted financial markets and other markets worldwide. Vietnam, with its high degree of openness to international markets, is not immune to these impacts," Mr. Hieu remarked. However, he also pointed out positive aspects such as favorable inflation control, continued growth in foreign investment, and import-export activities. The government aims for GDP growth of approximately 6.5% for the whole year of 2024. Four Variables Affecting the Vietnamese Economy in 2025 : In 2025, expert Nguyen Tri Hieu predicts that the impacts from 2024 will continue, accompanied by new developments, especially on the geopolitical "front." Mr. Hieu analyzes that with a second term for re-elected President Donald Trump, the world will face aggressive protectionist trade policies, and Vietnam will also be strongly affected. The expert notes four key variables for the Vietnamese economy next year. First is the exchange rate. The USD-Index – a measure of the strength of the US dollar against a basket of major currencies – has recorded a strong increase recently, and it is predicted that the Vietnamese Dong will depreciate by about 5% in 2024. In 2025, the exchange rate may continue to be influenced by Donald Trump's economic policies. "Experts believe that Trump's tax policies will increase the US budget deficit and potentially force the US government to issue high-interest bonds to balance the budget. The budget deficit could also force the Federal Reserve (Fed) to buy more US government bonds, inflating the central bank's total assets and injecting a large amount of money into circulation. These factors could increase inflation and force the Fed to reverse its current loose monetary policy back to a tightening one. This would put upward pressure on the USD/VND exchange rate ," Mr. Hieu said. 2025 could be a challenging year for the Vietnamese economy (Photo: Manh Quan). The next variable is the possibility of the US imposing high import tariffs on countries with a trade surplus with the US, including Vietnam. "Vietnam is heavily dependent on the US market because the US is its number one export partner," Mr. Hieu noted. In this context, Mr. Hieu believes that the way to balance the situation is to increase imports from the US to reduce the trade surplus. At the same time, it is necessary to seize opportunities from US businesses relocating from China to Vietnam, especially in the high-tech and semiconductor manufacturing sectors. The third variable, according to this expert, is the geopolitical situation with fluctuations in "hot spots" like Ukraine, the Middle East, and recently South Korea, which could create unpredictable developments affecting global currencies and Vietnam's economic policies. The remaining variable is the internal issues of the Vietnamese economy. Mr. Hieu stated that many businesses are still struggling to recover after the Covid-19 pandemic. Despite significant support from the Government and the State Bank, businesses have not yet fully recovered. GDP growth for the whole year could reach 7.25%. From a more optimistic perspective, Dr. Luong Van Khoi, Deputy Director of the Central Institute for Economic Management Research (CIEM), believes that Vietnam still has many drivers to boost growth in 2025. Besides inflation remaining under control, economic sectors are still growing steadily, with the industrial and service sectors showing better growth. While domestic consumption recovery hasn't met expectations, people's living standards are improving, and the number of international tourists is expected to continue growing well, helping to boost domestic market growth. GDP for the whole year could increase by up to 7.25% (Photo: Manh Quan). Along with that, infrastructure is increasingly improving, especially the extension and expansion of expressways to many localities, helping to increase inter-regional connectivity… The strong increase in state budget revenue in 2024 also provides a basis for the State to continue increasing public investment spending and spending on implementing development support policies. At the same time, some newly issued policies will help form a better institutional framework for economic development, especially new laws enacted in 2023 and 2024 such as the Land Law, Housing Law, Real Estate Business Law, and Bidding Law, which are effective and have detailed institutionalization… Mr. Khoi also assessed that if the major drivers contributing to economic growth perform well in the last quarter of the year, the GDP for the whole year could increase to 7.25%. However, to seize these opportunities, Mr. Luong Van Khoi emphasized the need for agencies to continue improving institutions, effectively utilizing capital for development, strengthening institutional frameworks to effectively guide FDI capital, and improving infrastructure for development through increased public investment in transportation infrastructure, especially the development of expressways and airports, to support production and business... "Besides opportunities, there will also be challenges. With the determination of the Party, the State, and the Government, I believe that this will create positive impacts on the Vietnamese economy in 2025," Mr. Khoi stressed.
Báo Dân trí•13/12/2024
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