By Thai Ha
Wed, May 7, 2025 | 12:42 pm GMT+7
The Vietnamese Government is resolute in its ambition to achieve an 8% economic growth target for 2025, despite the myriad challenges it faces. Prime Minister Pham Minh Chinh articulated this commitment during a recent cabinet meeting, emphasizing the need for innovative solutions to mitigate the impact of U.S. reciprocal tariffs.
### Economic Challenges and Tariffs
In light of rising tariffs imposed by the U.S., the Prime Minister acknowledged that reaching the 8% benchmark demands substantial effort. These tariffs have created pressures on macroeconomic management, especially concerning interest rates, exchange rates, and inflation. The external environment is turbulent, complicating Vietnam’s economic landscape and increasing the urgency to adapt.
### Struggles in the Business Sector
Prime Minister Chinh highlighted persistent difficulties within various sectors. Many private enterprises are facing tough conditions, resulting in a notable number of business closures. Access to credit remains a significant impediment, further exacerbating the situation for domestic firms. As traditional growth drivers falter, new avenues for economic expansion are still in nascent stages, requiring time and nurturing to flourish.
### Confidence in the Economy
Recent reports signaled a dramatic decline in business confidence in Vietnam, plummeting to the lowest levels since August 2021. Concerns over the ramifications of U.S. tariffs have left manufacturers anxious about future production operations. According to S&P Global, the S&P Global Vietnam Manufacturing Purchasing Managers’ Index (PMI) dropped to 45.6 in April, indicating marked deterioration within the manufacturing sector after a brief glimmer of growth in March.
### Stability Amidst Struggles
Despite these challenges, some encouraging trends were noted. During the first four months of the year, the macroeconomy exhibited stability, with GDP growth reportedly surpassing last year’s figures. Key economic balances, including the budget deficit and public debt, are considered manageable, raising hopes for a brighter outlook.
### Export Growth
Vietnam’s export performance has been notably robust, with earnings rising by 13% to $140.34 billion in a four-month period. This growth was complemented by an 18.6% increase in import expenditures. Notably, the trade surplus stood at $3.79 billion, reflecting positively on Vietnam’s economic resilience.
### Foreign Investment Surge
The landscape of foreign direct investment (FDI) also showed promise. Registered FDI reached $13.82 billion—a staggering increase of 39.9%—while disbursed capital saw a 7.3% rise to $6.74 billion, marking the highest levels seen in five years. These figures underscore the continued attractiveness of Vietnam as a destination for foreign investors.
### Inflation Dynamics
On the inflation front, the Consumer Price Index (CPI) recorded a modest increase of 0.07% in April compared to March, with a year-on-year rise of 3.12%. The food and catering sector contributed significantly to this uptick, indicating an ongoing trend within consumer spending dynamics.
### Gold and Currency Trends
Sharp variations in gold prices were observed, climbing 10.54% from the previous month and 37.14% year-on-year. This rise adds a layer of complexity to the economic picture, as does the behavior of the U.S. dollar in the local context. In April, its price index increased both month-on-month and year-on-year, influenced mainly by rising domestic demand.
The Vietnamese economy, while grappling with significant external pressures, is demonstrating resilience and potential for growth. The government’s proactive stance and commitment to its economic targets reflect a determination to navigate these challenges effectively.