U.S. new trade policies may cause neutral impact on Vietnamese economy in 2025

The senior economist made the assessment during an interview with the VGP after the Government proposed a GDP per capita target in excess of US$5,000 for 2025 and GDP growth rate of at least 8 percent to US$500 billion this year.

Jola Pasku said that Viet Nam has positioned itself as a hub for assembly, packaging, and testing for semiconductor chips, and the chip-led tailwind is expected to continue next year, though the boost will be weaker than in 2024.

S&P Global Market Intelligence expects some softness in the near term, considering that high base effects will also come into play.

Solid wage growth on the back of foreign direct investment (FDI) job creation should support private consumption. In January, over US$4.33 billion in foreign direct investment (FDI) was funneled into Viet Nam, a year-on-year surge of 48.6 percent.

With the number of operating enterprises growing by a markedly 30.4 percent year over year during 2024, asset accumulation will likely be stronger over the near term, though FDI inflows may temporarily slow down in early 2025 while awaiting possible U.S. tariff announcements on Viet Nam.

The near-term outlook is subject to heightened uncertainties with the shift in global trade dynamics.

On one hand there is an upside risk with a possible boost from the front-loading of orders driven by potential U.S. tariff. At the same time, this potential tailwind would be largely offset by the increasing likelihood of targeted and/or anti-dumping tariffs from the U.S.

S&P Global expected the impact of U.S. administration trade policies will be neutral in 2025 and a net negative for Viet Nam's economy in 2026.

"We project annual real GDP growth to expand by 6.4 percent in 2025 led by manufacturing, with contributions from machinery and textiles, before moderating to 6.3 percent in 2026," Jola Pasku said./.