Project

AMRO forecasts Vietnam’s economy to grow by 6.5 per cent in 2025

Published

6 days ago

March 6, 2025

ASEAN+3 Macroeconomic Research Office (AMRO) estimates Vietnam’s economy to grow by 6.5 per cent in 2025, after posting a strong 7 per cent growth in 2024.

AMRO forecasts Vietnam’s economy to grow by 6.5 per cent in 2025

Despite potential headwinds from heightened US trade protectionism, Vietnam’s growth is projected to be supported by improving domestic demand and front-loaded external orders.

To sustain this momentum, an appropriate policy mix is essential to promote growth while safeguarding financial stability. These insights are highlighted in the 2024 Annual Consultation Report on Vietnam released by the AMRO on March 6.

Despite being hit by Super Typhoon Yagi, the Vietnamese economy continued to gain momentum in 2024, driven by robust external demand. The recovery was led by manufacturing exports, a rebound in the hospitality sector, and steady inflows of foreign direct investment (FDI). However, household spending and private investment by domestic firms remained stagnant.

In 2025, external demand is projected to remain strong in the first half of the year due to front-loaded orders ahead of the potential increases in US tariffs. Local demand is expected to improve, while public investment would be expedited before the next Vietnam Presidential election in early 2026.

Despite the stronger demand pressure, consumer price inflation is forecast to decline from 3.6 per cent in 2024 to 3.5 per cent in 2025 on the back of a moderation in global energy prices.

The Vietnamese authorities have implemented a combination of monetary and fiscal measures to support economic recovery. The government has extended several relief initiatives into 2025, including a 2 per cent reduction in VAT, along with deferrals for tax and land rent payments.

On monetary policy, the State Bank of Vietnam has kept operating interest rates low, reduced open market operation rates, raised the indicative credit growth target, and extended the loan moratorium programme for an additional six months. Additionally, state-owned commercial banks have lowered short-term deposit and lending rates to steer broader market interest rates downward.

Risks to Vietnam’s growth outlook are skewed to the downside. The country’s strong export recovery could face external headwinds, including weaker-than-expected consumer demand in the US, a pronounced economic slowdown in Europe, and slower growth in China. Additionally, uncertainty surrounding US trade policy further clouds the export outlook.

The financial sector continues to grapple with lingering credit risks, driven by the delayed impact of an uneven economic recovery and the aftermath of Typhoon Yagi. The loan moratorium programme freezes borrowers’ loan classifications and allows them to defer principal repayments on existing loans, while enabling them to secure new credit from banks.

In the housing market, delays in implementing new real estate-related laws could further dampen prospects. Amid various market challenges, some property developers are facing difficulties with debt repayment and refinancing, adding to the sector’s vulnerabilities.

In the longer term, Vietnam’s growth potential is constrained by several structural challenges, including insufficient infrastructure development, a persistent mismatch between workforce skills and industry requirements, and the underdevelopment of domestic supporting industries and micro-, small and medium-sized enterprises (MSMEs).

Adding to these pressures are emerging challenges such as cyberattacks, extreme weather events, and the rapidly aging population, which pose growing threats to the country’s macroeconomic and financial stability.

Given an uneven economic recovery, Vietnam’s ample fiscal space can provide room for the government to extend additional support measures to vulnerable segments such as MSMEs and low-income households. Moreover, the disbursement of public investment can be expedited to boost short-term growth and strengthen long-term growth potential.

AMRO noted state revenue management should be strengthened further by enhancing the enforcement and compliance of tax laws, simplifying the tax system, broadening the revenue base, and minimising tax exemptions.

Revising the State Budget Law to reduce the settlement time of the government annual accounts and minimising carry-over spending should also be considered.

“Given contained inflationary pressure, weak domestic demand, and subdued performance of MSMEs, monetary policy should remain accommodative to foster a more inclusive economic recovery,” AMRO said.

“The recent rate cut by the US Federal Reserve has eased pressure on the VND and lowered the risk of speculative capital outflows. Monetary reforms should focus on gradually phasing out quantitative credit targets and transitioning towards a more market-driven interest rate approach.”

Project

Real estate capital heading into suburban areas

Published

5 hours ago

March 12, 2025

Industrialzone.net

The shortage of affordable apartments in Ho Chi Minh City has led buyers with tight budgets to seek properties in neighbouring markets.

The real estate market in Ho Chi Minh City is facing a scarcity of land, while the cost of project development is continuing to rise. This has forced investors to carefully consider which product segments to focus on to ensure profits.

Real estate capital heading into suburban areas

Photo: baodautu.vn

Investors with land in strategic locations close to the city centre are prioritising the development of mid-range and high-end products to optimise financial outcomes.

As a result, buyers seeking affordable options are being forced to look elsewhere.

“The shortage of affordable apartments in Ho Chi Minh City has led buyers with limited finances to seek items in neighbourhoods like Binh Duong, Dong Nai, and Long An. In these areas, apartment prices hover at around $1,200-$1,600 per square metre, creating strong demand,” said Giang Huynh, head of research and S22M at Savills Ho Chi Minh City.

From another perspective, the average rental yield for apartments in Binh Duong is currently 4.7 per cent, well above the 3.7 per cent yield in Hanoi and 3.6 per cent in Ho Chi Minh City.

Dinh Minh Tuan, southern regional director of real estate trading platform Batdongsan.com.vn, shared that the high rental yield in Binh Duong is largely due to reasonably priced luxury apartments, with high rental prices and stable occupancy rates.

On average, a luxury apartment in Binh Duong can be rented for $400-$480 per month for a one-bedroom unit, and from $600-$800 for a two- to three-bedroom unit.

Meanwhile, in Ho Chi Minh City or Hanoi, apartments in the $1,800-$2,000 per square metre range can only be rented for around $280-$480 per month, depending on the number of bedrooms, not to mention the increasingly stiff competition in enticing tenants.

In response to the strong capital shift, real estate firms in Ho Chi Minh City’s suburban areas are accelerating legal procedures to launch new projects.

This trend reflects the investors’ agility and creates attractive opportunities for both homebuyers and investors in 2025.

Accordingly, Kim Oanh Group plans to launch a 27-hectare urban area in New Binh Duong City in the first quarter of 2025.

This will be the first project the company has collaborated on with Surbana Jurong, a partner from Singapore, under EDGE green standards.

The project features 1,656 townhouses and terraced houses, and 1,666 social apartments, priced from $28,000 per unit.

Major developer Phat Dat Real Estate Development Corporation plans to launch two major projects, Thuan An 1 and 2 in Binh Duong province, covering a total area of 4.46 ha.

The 1.8ha Thuan An 1 will provide 2,604 apartments and shophouses, while the 2.66ha Thuan An 2 will have 3,270 apartments and 16 townhouses. These projects are located on key roads.

Simultaneously, southern developer An Gia Group plans the launch of 3,000 apartments at The Gio Riverside and 76 shophouses in Di An city.

The three-hectare project, located on the provincial route DT16, offers nicely designed apartments with one to two bedrooms.

Regarding opportunities for homeownership, Phan Cong Chanh, an expert in real estate investment, noted that owning a home requires solid knowledge and time to raise financial resources.

For young people, buying a home immediately is a challenge due to limited finances.

Buyers can explore financial support packages and use leverage to shorten the time needed to purchase real estate. This needs to be accompanied by a reasonable plan to ensure long-term affordability.

“Overall, owning a home is not just a purchasing decision; it also requires a smart financial strategy. Whether choosing to buy immediately, rent, or invest in real estate in any segment, individuals must consider their financial conditions and personal plans carefully,” said Chanh.

Project

VinFast looks to long term with operational roadmap

Published

7 hours ago

March 12, 2025

Industrialzone.net

Carmaker VinFast aims to become a powerhouse in the electric vehicle market as it grapples with tougher competition abroad.

VinFast looks to long term with operational roadmap

The company wants to double EV sales when compared to last year’s figure

Potential investment from JTA Investment through an MoU between Vingroup and Qatar Investment Fund, which was unveiled last week, aligns perfectly with VinFast’s ambitious vision of scaling up production and sales in a competitive international market, the company said.

JTA Investment is exploring a potential equity investment of at least $1 billion in VinFast, the Nasdaq-listed EV manufacturer, as well as a strategic partnership aimed at supporting the company’s global expansion and technological development.

“This collaboration will unlock significant opportunities for Vingroup and its subsidiaries to drive technological, infrastructural, and sustainable economic advancement in Vietnam, while establishing a foundation for international expansion,” said Le Thi Thu Thuy, vice chairwoman of Vingroup.

Global electric vehicle (EV) competition is expected to get tougher as the demand for EVs is projected to increase further this year, but the outlook is being hindered by uncertainty surrounding tariffs and policy changes.

In 2025, S&P Global Mobility projects that 15.1 million battery EVs will be sold worldwide, a 30 per cent increase on last year. It is anticipated that 16.7 per cent of the light vehicle market will be made up of battery-based EVs.

S&P also reported that major unknowns await Chinese manufacturers BYD and Tesla in 2025 due to assumed changes to the US Inflation Reduction Act.

Last year, VinFast stated that it was delaying the opening of its North Carolina factory until 2028, which will allow the company to optimise its capital allocation and manage short-term spending more effectively, focusing more resources on supporting near-term growth targets and strengthening existing operations.

The company is expanding its strategy in India, Indonesia, and the Philippines, where EV infrastructure is developing rapidly but competition from domestic brands is limited. Experts said that in order to sustain long-term growth, it needs to compete with Chinese manufacturers and prove its competitiveness beyond its home market.

VinFast is scheduled to open factories in Subang, West Java and in the southern Indian state of Tamil Nadu this year. The plan to expand into India aims to seize growth opportunities in the world’s most populous nation and rapidly expanding EV market.

On February 28, VinFast and Motech Automotive Service Centres, through its franchisor and operator in the Philippines, signed an MoU on expanding the service network for VinFast’s EVs in the market. The agreement aims to meet the increasing demand for EVs among Filipino consumers, while affirming VinFast’s long-term commitment and determination to utilise green transformation across the region.

VinFast and Motech will collaborate to accredit over 60 Motech service workshops as approved VinFast service centres. In the Philippines, these service centres will have the authority to handle VinFast EV maintenance, warranties, and repairs. This year, VinFast intends to open over 100 similar service workshops throughout the Philippines.

In 2025, the company has set the ambitious target of doubling sales to around 200,000 EV globally after announcing impressive results in 2024, with 97,300 EVs sold globally, of which about 87,000 vehicles came from the domestic market.

Project

M&As in crucial sectors poised for rapid expansion

Published

9 hours ago

March 12, 2025

Industrialzone.net

Following the downturn, Vietnam’s merger and acquisition landscape is set to gain momentum in 2025, driven by spearhead industries from technology to manufacturing. Julien Curtet, partner of Index Partners, shared with VIR’s Thanh Van his insights into the overview and the prospect of the market.

How do you see Vietnam’s merger and acquisition (M&A) market affected by global market volatility?

M&As in crucial sectors poised for rapid expansion

Julien Curtet, partner of Index Partners

In 2024, global M&A activity rebounded, reaching approximately $3.5 trillion (a 15 per cent increase from 2023) with around 7,500 deals above $30 million. Corporate acquisitions rose by 12 per cent, and financial investor activity surged by 29 per cent, driven by private equity amid easing interest rates. Key sectors included technology, energy, financial services, and telecom.

Vietnam mirrored global trends with notable M&A activity in technology, energy, and industrial sectors, supported by a resilient macro and rising foreign investment.

In 2024, Vietnam’s M&A market experienced a downturn in transaction value, influenced by global economic uncertainties stemming from geopolitical tensions and currency fluctuations. However, deal volume reached around 160 transactions in the second half of 2024, marking a 25 per cent rise from the first half of 2024 and a 32 per cent jump from the second half of 2023, signalling a strong recovery trend and positive momentum for future growth. Some key deals in the second half of 2024 were Masan’s acquisition of an additional 7.1 per cent stake of VinCommerce from SK Group for $200 million, KIDO’s acquisition of Hung Vuong, Nvidia’s acquisition of VinBrain, and SK Group’s $300 million acquisition of Iscvina Manufacturing.

Mid-cap deals up to $25 million dominated Vietnam’s M&A market, accounting for just over half of total deal volume despite a 28 per cent drop in total transaction value. Mid-size transactions in the second half of the year included ADA’s acquisition of Customore and Elan’s $8.89 million acquisition of TMC Vietnam.

Could you shed light on some key drivers for the Vietnamese market in 2025 and beyond?

In 2025, it is set for strong growth, driven by key sectors such as infrastructure, technology, consumer, and manufacturing. Infrastructure will see a surge in investment, particularly in transportation and logistics, supported by government initiatives.

The technology sector is poised for rapid expansion, fuelled by favourable policies and accelerating digital transformation. Consumer spending is expected to rebound from a low base, signalling a recovery in the consumer sector.

Meanwhile, the manufacturing sector, which contributed over one-quarter of GDP in 2024, is projected to grow by 10 per cent in output, supported by new industrial zones and increased foreign investment.

The market is set to accelerate in the second half of 2025, fuelled by stable global interest rates and rising investor confidence.

Vietnam’s strong economic momentum, pro-investment policies, and booming sectors like technology, manufacturing, infrastructure, and recovery of consumer will drive deal activity, cementing its status as a key M&A hub in Southeast Asia.

How do foreign dealmakers approach strategies amidst global economic uncertainty, especially tariffs and new US policy?

Foreign dealmakers are reshaping their M&A strategies. Despite the challenges, Vietnam remains a key destination for cross-border investment, driven by its rapidly expanding technology, consumer, and manufacturing sectors.

Vietnam is rapidly advancing its technology sector, emerging as a significant player in the global digital landscape. Its commitment to technological innovation is evident through key partnerships, such as the collaboration with Nvidia to establish AI research and data centres in the country.

To further entice high-tech investments, the government offers substantial incentives, including up to four years of tax exemptions and a 50 per cent tax reduction for the subsequent nine years, as well as financial support from national sci-tech development funds.

Additionally, Vietnam’s consumer market is expected to recover in 2025, fuelled by a rising population, and increasing disposable incomes, boosting demand for goods and services. With consumer confidence rebounding and spending accelerating across sectors, Vietnam’s consumer market is regaining momentum as a vital driver of economic growth.

Vietnam is emerging as a manufacturing and logistics hub, attracting foreign investments due to its competitive labour costs (20–50 per cent lower than regional peers) and a 9.8 per cent increase in manufacturing output in 2024. An “anything but China” strategy is driving multinationals to shift production to Vietnam.

The country is also benefiting from major infrastructure projects, including the Long Thanh International Airport and deep-sea ports in Haiphong, are strengthening its logistics position, while expanding industrial areas and cross-border e-commerce fuel growth in both sectors.