According to Mr. Nguyen Minh Hoang - Director of Analysis of Nhat Viet Securities Joint Stock Company (VFS), with the target of GDP growth at 6.5 - 7%, the basic policy orientation is still to maintain flexible and loose economic policies, creating favorable conditions for the development of the economy and financial markets. Along with that is the effort to stabilize exchange rates and the currency market, supporting positive sentiment in the market.

On the other hand, the upgrade to the emerging market group is expected to bring billions of dollars in capital flows from investment funds, both passive and active, creating a great impetus for liquidity and sustainable growth. Cash flows from individual investors are expected to return to the market when other investment channels are less attractive, opening up opportunities for the market to enter a new growth cycle after a medium-term accumulation period.

In 2025, major central banks will continue to maintain loose monetary policies, especially from the US Federal Reserve (FED) and the European Central Bank (ECB). This will facilitate foreign capital flows back into Vietnam, while the cost of capital remains low, making it easier for domestic enterprises to expand production and investment.

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Major Central Banks are expected to cut interest rates. Photo: Goldman Sachs

In addition, according to Mr. Nguyen Minh Hoang, China's economic recovery efforts, especially in the real estate sector, will significantly support industries such as steel and construction in Vietnam thanks to the close trade relationship between the two countries. In addition, industries that export a lot to China are expected to benefit, such as seafood, rubber, agricultural products, garments, etc.

“However, the US-China trade tensions pose many challenges. If China devalues ​​the yuan to increase exports, Vietnam’s exchange rate may come under pressure, affecting its competitiveness and macroeconomic stability,” the expert said.

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Proportion of goods exported to China in 10 months of 2024. Photo: FiinPro (VFS synthesis)

In Vietnam, the Government will continue to apply tax incentives and remove legal difficulties to support the securities, real estate, public investment sectors... thereby promoting economic growth.

“Public investment will be boosted, especially in the energy, transport and logistics sectors, to stimulate short-term demand and address infrastructure shortages. Public investment capital in 2025 is expected to reach VND790 trillion. Inflation is forecast to remain at 3.4 - 4%, lower than the government's target of 4.5%. Therefore, the government may accept a slightly higher inflation rate to achieve its economic growth target. However, the exchange rate remains a concern in 2025, especially when President Donald Trump's policies could increase global trade tensions and strengthen the USD,” the expert said.

Target 2023 2024 2025 2026-2023
Preliminary KH Estimate KH KH
GDP growth rate 5.05% 7% 6.8-7% 6.5-7% 7.8-8.5%
GDP growth per capita (USD) 4284 4,700-4,730 4,647 4,900 7,400-7,600
Proportion of industry, processing and manufacturing in GDP 23.60% 24.1 - 24.2% 24.10% 24.10% 28-30%
CPI growth rate 3.25% 4-4.5% <4.5% 1.50%
Budget deficit 4.00% 3.60% 3.40% 3.80% <=5%
Average labor productivity growth rate 3.65% 4.8 - 5.3% 5.56% 5.3-5.4% 6.5-7.5%
Proportion of agricultural labor / total labor 26.94% 26.50% 26.50% 25-26%
Urban unemployment rate 2.66% <4% <4% <4%

The Government and the State Bank will use flexible monetary policy and expansionary fiscal policy to support the economy to maintain growth momentum. Photo: FiinPro (VFS synthesis)

By 2025, Vietnam’s stock market is expected to be upgraded to the emerging market group of MSCI or FTSE Russell. This is supported by the amended Securities Law, which will take effect from the beginning of 2025 with regulations on payment and clearing and allows the Vietnam Securities Depository (VSD) to establish a subsidiary to implement the central counterparty (CCP) mechanism. This will enable foreign investors to trade T+2 without having to deposit 100%, solving some of the remaining problems in upgrading the market.

Mr. Nguyen Minh Hoang said that the stock market in the past 2 years has been quite stable with prices not increasing sharply. Therefore, with other investment channels tending to fluctuate less, as well as the ability to pay for investment channels such as gold and real estate getting lower, cash flow is expected to flow into the stock market, creating growth momentum for this market in 2025.

VFS maintains a positive outlook for the stock market in 2025. With GDP growth expected to reach 6.5 - 7%, business results of listed enterprises could increase by 14 - 17%, thereby boosting stock valuations.

“The 1,300-point mark is considered feasible in 2025, when the PE fw index is forecast to increase from more than 11 times to 13.5 times, equivalent to the historical average. Investment profits from the VN-Index are forecast to reach 10-18%. Liquidity is expected to grow by 15-20%, reaching 18-20 trillion VND, thanks to expectations of market upgrading, T+0 transactions and the return of foreign capital flows,” said Mr. Nguyen Minh Hoang.

In July 2024, VFS launched the "VFS Expert" program - accompanying experts to increase financial investment knowledge.

For more information about VFS Expert, please visit: https://vfsinvest.vfs.com.vn/home/VFSExpert

(Source: Nhat Viet Securities Joint Stock Company)