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| Tariff news will continue to play an important role in determining the direction of Vietnam's manufacturing industry. |
Second quarter economy and the "unknown" tariff
There is only half a month left until the end of June 2025. This also marks the halfway point of the 2025 economy. The question is, can the economy reach the finish line as expected?
It should be recalled that, after the GDP growth in the first quarter of 2025 reached only 6.93%, the economic growth scenario for 2025 has been updated by the Ministry of Finance . Accordingly, for the whole year's growth to reach over 8%, the GDP growth in the second quarter must reach 8.2%, bringing the overall growth rate of the first 6 months to 7.6%.
This is a considerable pressure, especially when the global and domestic economic situation has many fluctuations, after the Donald Trump administration announced the imposition of reciprocal tariffs on many countries, including Vietnam. Although the imposition of tariffs is currently on hold, it is not without impacts on the economy, especially on trade in goods.
S&P Global, when announcing the Purchasing Managers' Index (PMI) for May 2025, with a score of 49.8 points - although up from April 2025, but still below 50 points - also mentioned a decrease in new orders, due to the impacts of US tariff policies.
“May saw a more stable picture of US tariff policies than April, leading to a rebound in output and improved business confidence. However, manufacturers remain cautious about the impact of tariffs,” commented Andrew Harker, Chief Economist at S&P Global Market Intelligence, adding that tariff news will continue to play an important role in determining the direction of Vietnam’s manufacturing sector.
Sharing the same assessment of the impacts of the US tariff policy on the Vietnamese economy, UOB Bank, in a recent report, said that although economic activities have recovered, with import-export turnover increasing more strongly than expected during the tax suspension period, uncertainty still remains.
Therefore, UOB maintains a cautious view on Vietnam's prospects, as the economy is heavily dependent on trade, with the US market alone accounting for 30% of total exports. Therefore, UOB forecasts that Vietnam's GDP growth in the second quarter will only reach about 6.1%, in the third quarter it will be 5.8% and for the whole year it will be about 6%.
The above forecast is quite cautious, especially compared to the general development of the economy in the 2 months of the second quarter of 2025, as well as the first 5 months of the year. At the regular Government meeting in May 2025, held in early June 2025, the Ministry of Finance pointed out many bright spots of the economy.
Accordingly, the Industrial Production Index (IIP) in May increased by 9.4% over the same period; 5 months increased by 8.8%, of which the processing and manufacturing industry increased by 10.8%; total retail sales of goods and consumer service revenue in May increased by 10.2%, 5 months increased by 9.7%; May exports continued to grow positively, up 17% over the same period, 5 months increased by 14%; trade surplus is estimated at 4.67 billion USD...
These are positive indicators to expect GDP growth in the second quarter of 2025 to be higher than in the first quarter of 2025.
Maintain growth momentum
Although the economy is still developing quite positively, the difficulties are still very great. The possibility of high growth of over 8% in the last quarters of the year, including the second quarter of 2025, is a great pressure, requiring efforts from the entire economy. This pressure is even greater when the Government is still determined to bring economic growth to over 8% this year.
In the Resolution of the regular Government meeting in May 2025, issued last weekend, the Prime Minister directed to achieve the highest GDP growth target in the second quarter of 2025. If the second quarter growth does not meet the scenario, pressure will continue to be placed on the third and fourth quarters, in the context of not being able to predict the global economic situation early and how the US will decide to impose reciprocal tariffs.
Attracting foreign investment continued to be a bright spot, with total registered capital in the first 5 months reaching over 18.4 billion USD, up 51.1% over the same period last year; disbursed capital reached about 8.9 billion USD, up 7.9%... Disbursed public investment capital was also more positive, about 200,000 billion VND, reaching 24.3% of the plan assigned by the Prime Minister. "In absolute terms, we are higher than last year, and in relative terms, we are also higher," said Deputy Minister of Finance Do Thanh Trung. 
“As we approach mid-year, all eyes will be on US tariff policy to see how Vietnam’s manufacturing sector will be affected,” said Andrew Harker.
Meanwhile, UOB Research has pointed to the next “important milestone” as July 9, when the 90-day moratorium on reciprocal tariffs is expected to end. Vietnam is still negotiating a trade deal with the US. The next round of negotiations is expected to take place at the end of June. The outcome of the negotiations will impact Vietnam’s socio-economic development this year.
While the tariff “unknown” remains to be seen, solutions to boost growth are being implemented. The economy as a whole is working hard to maintain growth momentum.
Minister of Finance Nguyen Van Thang, in a recent report sent to the National Assembly on a number of issues related to the group of questions in the financial sector at the 9th Session, pointed out 10 groups of tasks and solutions that need to be focused on in the coming time to help the economy achieve an 8% growth rate this year.
In addition to closely monitoring the global economic and political situation and accurately assessing the reality to have timely policy responses, it is also necessary to closely monitor price developments of strategic commodities in the world market, proactively analyze, forecast, develop solutions and response scenarios, and ensure the target of controlling inflation at around 4.5-5%.
Along with that, strongly develop the domestic market; focus on perfecting institutions, improving the investment and business environment; strongly develop the financial market, capital market; attract foreign investment resources for development...
“It is necessary to focus on unblocking and effectively using public investment resources; have more drastic and timely solutions to accelerate the disbursement of public investment capital, striving for the disbursement rate in 2025 nationwide to reach 100% of the plan,” Minister Nguyen Van Thang reported.
The head of the financial sector also emphasized the synchronous implementation of investment promotion solutions to unblock capital flows and promote the driving role of the private economic sector, including how to attract all social investment resources for growth; remove difficulties and obstacles for backlogged and prolonged projects, causing loss and waste, etc.
Source: https://baodautu.vn/ben-bi-giu-da-tang-truong-kinh-te-d304228.html
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