Vietnam Economic News Insight & Recap – April 2025 by Grant Thornton

In April 2025, Vietnam’s economy showed signs of strain amid mounting external pressures, particularly after the U.S. announced the imposition of new tariff rates on a wide range of Vietnamese goods. The World Bank revised its 2025 growth forecast for Vietnam down to 5.8%, citing weakened global demand and Vietnam’s high trade dependency on key partners like the U.S. and China. This vulnerability was reflected in a sharp contraction in manufacturing activity, as the PMI dropped to its lowest level since mid-2023. Despite a headline surge in FDI, the decline in new project registrations signals growing investor caution, while the trade surplus narrowed by nearly 60%, driven by faster import growth.

In response to the current challenging environment, Vietnam is making adjustments both tactically and strategically. In the short term, the government is ramping up imports from the U.S., particularly high-value goods like aircraft and machinery, to ease trade imbalances and build goodwill in negotiations. Concurrently, it is accelerating outreach to new markets through FTAs and diplomatic channels, with notable momentum in non-traditional destinations such as India, the UK, and the Middle East.

At the core, however, is a deeper structural challenge. Businesses in the domestic sector are still building capacity to participate more meaningfully in higher-value production. Localization, value-chain control, and support for domestic producers are critical for the long-term economic growth of Vietnam. The current trade tensions may, in that sense, become a catalyst: pushing Vietnam to accelerate reforms, not just to weather this period of uncertainty, but to anchor more sustainable growth.

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