Future of Vietnam's economy: opportunities and challenges

Future of Vietnam's economy: opportunities and challenges

Vietnam's economy is facing challenges, but opportunities await as the global financial outlook evolves.

Suan Teck Kin, executive director of global economics and markets research, UOB Group

Talking with VIR at a seminar themed "Future of Vietnam's economy: Opportunities and Challenges" held on March 4 in Ho Chi Minh City by the Ho Chi Minh City Investment and Trade Promotion Centre (ITPC), Suan Teck Kin, executive director of global economics and markets research at UOB Group, emphasised that risks from fluctuating tariff policies and global supply chains will impact financial markets.

Fluctuating exchange and interest rates are also challenges but provide opportunities for Vietnam to diversify trade and attract investment, while improving competitiveness.

“For the challenges, tariff threats mean market and supply diversification will be key for export-oriented economies. Financial market risks where US dollar and FX volatility driven by US trade policy and geopolitical uncertainty may cause supply chain shifts to favour ASEAN,” Kin said.

However, he also pointed out the opportunities moving forward. Trade diversification to reduce risks of over-dependence, domestic infrastructure investment to help mitigate external risks, and strengthening future competitiveness and fiscal support should play an important role.

“Sectors that could benefit from Trump's policies include banking (loosening regulations), the housing market (lower interest rates), domestic manufacturing (domestic taxes, import tariffs), and fossil fuels and heavy industry (reducing regulations on green standards),” said Kin.

Speaking at the event, Cao Thi Phi Van, deputy director of ITPC, emphasised that in the context of global fluctuations, grasping trends and preparing appropriate business strategies will help Vietnamese enterprises take advantage of opportunities and minimise risks.

"Today's seminar is one of the activities that helps connect experts, businesses, and investors to share perspectives and practical solutions," Van said.

Also at the seminar, businesses, investors and economic experts exchanged information and discussed in-depth macroeconomic issues, especially the impact of the new trade policy from the US under the administration of President Donald Trump on Vietnam.

Experts predict that the Trump administration will continue to maintain a tough stance on trade, possibly applying additional measures to control imports, adjust tariff policies, and strengthen regulations on foreign investment.

These changes are expected to have significant impacts on the global economy, posing opportunities and challenges for Vietnamese businesses in investing and attracting investment, as well as adjusting business strategies.

The event attracted the participation of more than 100 business representatives, investors, and economic experts, creating a forum for information exchange and in-depth discussion on macroeconomic issues, especially the impact of the new trade policy from the US under the Trump administration on Vietnam.

VIR