(Dan Tri) - Experts predict that 2025 could be a challenging year for Vietnam's economy with four main variables including exchange rates, import and export, the world geopolitical situation and internal problems of Vietnam's economy.
At the workshop "Investment 2025: Decoding variables - identifying opportunities" organized by Investment Newspaper on December 12, economist Nguyen Tri Hieu, Director of the Institute for Research and Development of Global Financial and Real Estate Markets, made important comments on Vietnam's economic situation in 2024 and 2025. Mr. Hieu said that 2024 will be a challenging year for Vietnam due to fluctuations in geopolitics and the global economy. "These factors have strongly affected the financial market and other markets in the world. Vietnam, with its great openness to the international market, is not out of the impact," Mr. Hieu said. However, he also pointed out bright spots such as controlling inflation at a positive level, foreign investment and import and export continued to increase. The government targets GDP growth for the whole year of 2024 at about 6.5%. 4 variables for Vietnam's economy in 2025 In 2025, expert Nguyen Tri Hieu predicts that the impacts from 2024 will continue to last, accompanied by new events, especially on the geopolitical "front". Mr. Hieu analyzed that with the second term of re-elected President Donald Trump, the world will face drastic trade protection policies, in which Vietnam will also be strongly affected. This expert noted 4 main variables for Vietnam's economy next year. The first is the exchange rate. The USD-Index - a measure of the strength of the greenback against a basket of major currencies - has recorded a sharp increase in recent times and it is forecasted that in 2024, the Vietnamese Dong will depreciate by about 5%. In 2025, the exchange rate may continue to be affected by Donald Trump's economic policies. "Experts believe that Mr. Trump's tax policies will increase the US budget deficit and potentially force the US government to issue bonds with high interest rates to balance the budget. The budget deficit could also force the US Federal Reserve (Fed) to buy more US government bonds, expanding the total assets of the US central bank and pushing a large amount of money into circulation. These things are likely to increase inflation and force the Fed to reverse its current loose monetary policy to tightening. This creates a driving force for the USD/VND exchange rate ," said Mr. Hieu. 2025 could be a challenging year for Vietnam's economy (Photo: Manh Quan). The next variable is that the US may impose high import tariffs on countries with trade surpluses with the US, including Vietnam. "Vietnam depends heavily on the US market because the US is the number one export partner," Mr. Hieu commented. In that context, Mr. Hieu said that the 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. The third variable pointed out by this expert is the geopolitical situation with fluctuations in "hot spots" Ukraine, the Middle East and recently South Korea, which can create unpredictable developments, affecting global currencies and Vietnam's economic policies. The remaining variable is the internal problems of the Vietnamese economy. Mr. Hieu said that many businesses are still struggling to recover after the Covid-19 pandemic. Despite great support from the Government and the State Bank, businesses have not fully recovered. GDP for the whole year could increase by up to 7.25%. On a more optimistic view, Dr. Luong Van Khoi, Deputy Director of the Central Institute for Economic Management (CIEM), said that in 2025, Vietnam still has many driving forces to promote growth. Besides the inflation factor that is still under control, economic sectors are still growing steadily, in which the industrial and service sectors are growing better. Although domestic consumption has not recovered as expected, people's living standards are changing and the number of international tourists is expected to continue to grow well, helping to promote domestic market growth. GDP for the whole year could increase by up to 7.25% (Photo: Manh Quan). Along with that, the infrastructure is increasingly complete, especially the expressway is extended and expanded to many localities to help increase inter-regional connectivity... The sharp increase in State budget revenue in 2024 is also the basis for the State to continue to increase public investment spending and spending on implementing development support policies. At the same time, a number of newly issued policies will help form a better institutional framework for economic development, especially new laws issued in 2023 and 2024 such as the Land Law, Housing Law, Real Estate Business Law, Bidding Law coming into effect and being institutionalized in detail... Mr. Khoi also assessed that if in the last quarter of the year, the driving forces contributing greatly to economic growth all perform well, the GDP for the whole year could increase by 7.25%. However, to seize the opportunities, Mr. Luong Van Khoi emphasized that agencies need to continue to improve institutions, effectively exploit capital sources for development, strengthen institutional improvement to effectively orient FDI capital sources, improve infrastructure for development through increasing public investment to develop transport infrastructure, especially developing highways and airports, supporting production and business... "In addition to opportunities, there will also be challenges. With the determination of the Party, State and Government, I believe that it will create positive impacts on Vietnam's economy in 2025", Mr. Khoi emphasized.
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