Vietnam economy in Q1/2025, resilient growth with emerging risks: Vietnam’s economy recorded several bright spots in the first quarter of 2025. GDP grew by 6.93%, below the target of 7.7% for Q1 under the 8% full-year growth scenario. While growth did not meet expectations, it was still the highest first-quarter performance over the past five years. 

Key growth drivers:  (i) Domestic consumption remained strong, with total retail sales of goods and services up 9.85%, or 7.5% after adjusting for inflation; (ii) Investment activity improved across sectors: state-owned enterprises: +7.4%, private sector: +5.5%; disbursed foreign direct investment (in VND): +9.3%); (iii) Public investment increased sharply by 19.8%; (iv) However, the trade balance deteriorated significantly, posing a downside risk to growth. 

Monetary and financial markets:  Interest rates and credit growth aligned with the Government and the State Bank of Vietnam’s direction, aimed at supporting businesses and stimulating consumption and investment. The stock market improved in terms of both index performance and liquidity. In the corporate bond market, repayment capacity among previously delayed issuers showed signs of improvement.

Despite positive headline figures, several domestic challenges remain: (i)  The urban youth unemployment rate rose sharply to 11.1%, potentially weakening consumer confidence and purchasing power in the quarters ahead. (ii) The net number of active businesses continued to decline, despite a rise in new registrations and reactivated firms. The high business exit rate reflects persistent difficulties in the business environment. (iii) Non-performing loans and corporate bond maturity pressure remain a concern, although early signs of recovery have emerged.

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External pressures increased following the U.S. announcement of reciprocal tariffs:​

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