UOB: Facing US Tariffs, Vietnam's Economy Expected to Still Grow Strongly

ANTD.VN - UOB experts believe that Vietnam is at high risk of facing tariffs or trade restrictions from the US, but will still grow strongly thanks to increased public investment and recovering consumption.

Economy faces challenges but will still grow strongly

At the event “Market Update: Global and Vietnam Economic Outlook 2025” organized by UOB Bank, experts from UOB and UOBAM Vietnam provided multi-dimensional assessments of the macroeconomic situation and Vietnam's economic outlook in 2025 in the face of trade tariff challenges under the Trump 2.0 administration.

In general, experts say that in 2025, the world economy is expected to face many uncertainties from the unpredictable policies of US President Donald Trump. The tariff war under the Trump 2.0 administration is likely to raise tensions and disrupt global trade, affecting countries with high levels of trade openness such as Vietnam.

Forecasting the ASEAN region's economy, Mr. Abel Lim, Director of Advisory and Strategy for Wealth Management, UOB Bank, commented that due to their heavy dependence on trade and close ties to the global supply chain, these countries are vulnerable to trade wars.

Among them, Vietnam and Thailand are at the highest risk of facing tariffs or trade restrictions from the US, as both countries have trade surpluses with the US.

“With a high level of openness, Vietnam is particularly vulnerable to disruptions in international trade, especially in the context of the US focusing on the issue of trade imbalance,” the expert commented.

UOB expert shares at the event

According to Mr. Le Thanh Hung, Investment Director of UOB Asset Management Vietnam, Vietnam's economy is expected to continue to grow strongly in 2025 thanks to domestic economic stimulus factors through public investment and credit growth as well as expectations for recovery in domestic consumption and the real estate sector.

However, the impact on Vietnam's economy during President Donald Trump's second term will have two main concerns: First, Vietnam's export revenue may be negatively affected if the US imposes tariffs on goods from Vietnam; second, the pressure on the USD/VND exchange rate when the USD continues to increase strongly.

This concern stems from the fact that the US is Vietnam's second largest trading partner (after China) in terms of bilateral trade turnover, Vietnam's largest export market (accounting for 30% of total export turnover) and has the largest trade deficit with Vietnam.

VND will continue to decrease, stocks are optimistic

Most Asian currencies have weakened against the US dollar recently. For example, the VND rose to around 25,600 VND to the US dollar in early March.

According to the expert, the VND's decline is likely to continue due to the slowdown of the Chinese economy and the possibility of the US imposing tariffs on Vietnam. However, several factors may help reduce the depreciation pressure on the VND, including the prospect of strong domestic growth and the SBV's commitment to ensuring exchange rate stability.

“Overall, our updated forecast for the USD/VND exchange rate is 25,800 in Q2 2025, 26,000 in Q3 2025, 25,800 in Q4 2025 and 25,600 in Q1 2026,” Mr. Abel Lim predicted.

Regarding the stock market, Mr. Le Thanh Hung believes that 2025 will continue to maintain a bright color scheme due to many supporting factors such as: domestic consumption and policies to expand public investment, the trend of high technology development and rapid digital transformation; business profits growing (earnings per share - EPS growth) with discounted valuations (P/E and P/B); the new stock trading system KRX is expected to come into operation in May 2025; the potential to upgrade Vietnam's market to an emerging market in 2025 by FTSE helps P/E valuations to be closer to emerging market levels.

UOBAM (Vietnam) forecast also gives the most optimistic scenario for the above important indicators such as: earnings per share EPS will grow 20% in 2025, P/E ratio will increase 15%, VNIndex will grow 21.3%...

Besides favorable factors, the risk factor for the stock market this year will be exchange rate pressure and US tariff pressure will negatively impact market sentiment and foreign investors will continue to net sell.

Regarding the investment strategy for 2025, the representative of UOBAM (Vietnam) commented positively on the prospects of the financial and industrial real estate sectors. The banking sector with the highest proportion in the VN-Index will still be the sector leading the index.

High credit growth in 2025 is the driving force for the banking industry this year.

Source: https://www.anninhthudo.vn/uob-nguy-co-doi-mat-voi-thue-quan-my-song-kinh-te-viet-nam-du-kien-van-tang-truong-manh-post607270.antd