Vietnam’s economy to slow despite exports jump, lower inflation – Moody’s

SINGAPORE (ICIS)–Escalating trade tensions with the US are casting a shadow over Vietnam’s growth trajectory in 2025, despite continued growth in exports as well as lower inflation.

• Inflation will stay below the government’s target of 4.5% to 5% this year – Moody’s
• Industrial output to slow due to poorer global demand, US tariffs
• 2025 GDP growth forecast cut to 5.8% from 6.5%

Headline inflation rose by 3.1% year on year in April, unchanged from March, while core inflation, which excludes food and energy, also remained at 3.1%, data by Vietnam’s General Statistics Office (GSO) showed on 6 May.

Industrial production growth in April slowed to 8.9% year on year, down from a revised 9.9% in March, displaying early signs of pressure on the manufacturing sector.

“We expect growth to slow this year as reduced global demand and higher tariffs on Vietnamese goods in the US hurt manufacturing,” financial intelligence firm Moody’s Analytics said in a note on 6 May.

Externally, Vietnam’s exports surged 19.8% year on year in April, outpacing March’s 14.5% rise, while imports jumped 22.9%, up from 19% previously.

The country still posted a goods trade surplus of $600m in April, though markedly lower than the $1.6bn recorded in March.

The US remained Vietnam’s largest export destination through the first four months of the year, but this position is increasingly uncertain.

In early April, US President Donald Trump floated a 46% tariff on Vietnamese imports, which was quickly revised to a temporary 10% levy for 90 days pending trade talks.

Moody’s Analytics expects Vietnam’s export growth to slow over the remainder of 2025 as the impact of higher US tariffs hits the manufacturing sector.

It has downgraded its GDP growth forecast for 2025 to 5.8% from 6.5% to reflect US trade policy and rising tariffs.

As part of its negotiation efforts with US trade officials which will begin on 7 May, Hanoi has proposed eliminating tariffs on US imports and could increase sourcing from the US to offset trade pressures.

The government is aiming for 8% GDP growth for 2025 despite risks from US tariffs.

Focus article by Jonathan Yee

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