Financial experts point out 4 variables in 2025, the risk of the US changing monetary policy

In 2025, Dr. Nguyen Tri Hieu predicts that the Fed will shift from easing to tightening when faced with the risk of rising inflation. This expert's perspective is not too optimistic in the global context next year.

Financial experts point out 4 variables in 2025, the risk of the US changing monetary policy

In 2025, Dr. Nguyen Tri Hieu predicts that the Fed will shift from easing to tightening when faced with the risk of rising inflation. This expert's perspective is not too optimistic in the global context next year.

The exchange rate may increase by 5% by the end of 2024 and continue to increase.

On December 12, Dau Tu Newspaper organized a workshop with the theme “Investment 2025: Decoding variables - Identifying opportunities”. The workshop is where leading economic experts evaluate existing and potential investment channels, and make recommendations to the business community and investors about opportunities and risks.

Sharing at the Investment 2025 Workshop: Decoding variables - Identifying opportunities, Dr. Nguyen Tri Hieu, Director of the Institute for Research and Development of Global Financial and Real Estate Markets, said that 2024 is a year full of fluctuations and challenges for Vietnam. And these challenges will continue in 2025.

“My outlook is not too optimistic about the global context next year, especially foreign trade. In recent days, there have been many geopolitical and economic fluctuations globally such as Mr. Trump's election victory, political conflicts and tense wars, or the unknowns of Trump's policies in his second term. I do not believe that the Trump administration will continue its monetary easing policy. Vietnam faces challenges in exchange rates, foreign trade, geopolitical tensions, and the internal economy,” economist Nguyen Tri Hieu also emphasized.

Therefore, the above conditions require careful preparation, because 2025 may be a challenging year for the Vietnamese economy. In particular, 4 main "variables" for the Vietnamese economy are pointed out.

Dr. Nguyen Tri Hieu, Director of the Institute for Research and Development of Global Financial and Real Estate Markets, is not too optimistic about the global context next year.

“First is the strong fluctuation in exchange rates. Up to now, the USD/VND exchange rate has increased by 4.5% and may increase by 5% by the end of the year. The exchange rate will increase and next year will fluctuate in an upward direction and depend largely on the US monetary policy,” said Mr. Hieu.

In 2025, this expert predicts that the Fed will shift from easing to tightening. Although Mr. Trump recently announced that he has not changed the chairmanship of the Fed, the Fed may face rising inflation. The reason is that the price of goods will increase after the tax is imposed. At the same time, the US labor market will be in shortage due to Trump's new immigration policy. Mr. Trump's tax cut policy for the rich will increase the US budget deficit and may force the US government to issue bonds with high interest rates to balance the budget. To push up bonds, interest rates must increase.

“With the above factors, I predict that US interest rates will increase, leading to a shift in the Fed’s monetary policy. At that time, the value of the dollar will increase, putting pressure on the exchange rate and making goods more expensive,” Mr. Hieu emphasized.

At the same time, foreign trade variables also need special attention. Vietnam's exports and imports are large, so they are greatly affected. Under the slogan "America First", Mr. Trump may impose high import tariffs on countries with trade surpluses to the US, including Vietnam (Vietnam is one of the 10 countries with the largest trade surplus to the US). If the US increases tariffs to 60% on China and lower rates on other countries (at least 25%), Vietnam's exports to the US will be greatly affected, affecting Vietnam's economic growth. Vietnam depends heavily on the US market - its number one export partner. Mr. Trump's trade protection policies, if implemented, will be very disadvantageous for Vietnam.

Vietnam’s foreign trade has grown strongly in recent years, with import-export turnover nearly double GDP. However, heavy dependence on the US market is also a risk. Mr. Trump’s protectionist policies will create major challenges, especially if Vietnam is put on the currency manipulation list as in the previous period. According to this expert, one way to balance is to increase imports from the US to reduce the trade surplus. At the same time, it is necessary to welcome opportunities from US businesses moving from China to Vietnam, especially in the high-tech and semiconductor manufacturing sectors.

In addition, the geopolitical situation is a notable variable. Hot spots in Ukraine, the Middle East, and recently the Korean peninsula, will create unpredictable developments, affecting global currencies and Vietnam's economic policies. The new government in Syria and the situation in South Korea will create global fluctuations, thus certainly affecting the situation in Vietnam.

In terms of the economy, many businesses are still struggling to recover from COVID-19, especially SMEs. According to Mr. Hieu's observations, many businesses said they could not borrow, and bad debts increased. Support from the Government and the State Bank is not enough to help businesses fully recover. 2025 may see an increase in the number of bankrupt businesses if there are no stronger support measures.

Opportunity but need to be careful

Despite many challenges, Vietnam has the opportunity to receive investment capital from US companies, especially in the high-tech and semiconductor sectors. This can promote the process of industrial modernization. Recently, the leading US semiconductor technology company, Nvidia, decided to choose Vietnam as the location for Nvidia's first R&D center in ASEAN.

If the trade war between the US and China breaks out, it is likely that some US companies operating in China will seek to move their production and business activities to neighboring countries, including Vietnam.

Vietnamese goods can benefit from lower tariffs than Chinese goods when exported to the US. However, learning from the lessons of previous years in Mr. Trump’s first term, if Vietnam is not careful and becomes a transit point for goods from China to the US because goods imported directly into the US from China are subject to very high tariffs, then Vietnam is likely to be monitored and punished.

Europe - Vietnam's second largest export market - also offers great opportunities, although the war situation in Ukraine may negatively affect the demand for goods in Europe. However, many Vietnamese consumer goods meet the tastes and needs of European people and are cheaper than domestically produced goods in Europe, so Europe remains Vietnam's largest export market after the United States.

Vietnam is in the process of restructuring its economy, creating a foundation for a new stage of development. However, Mr. Hieu also emphasized that the movements of the world economy require Vietnam to continue to adapt to the ever-changing global conditions and environment to maximize the benefits of international integration, while effectively responding to risks and barriers. "In life, there is one constant that never changes, which is the constant change of life", the saying of Philosopher Heraclitus was repeated by this expert at the Workshop.

Source: https://baodautu.vn/chuyen-gia-tai-chinh-chi-ra-4-bien-so-nam-2025-rui-ro-my-xoay-chuyen-cstt-d232290.html