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“Not Inflation or Interest Rates, ‘Trump’ is the Keyword Impacting Vietnam’s Economy in 2025, Say ADB and Dragon Capital Experts.”

13 November, 2024

On November 8, the Vietnam Investment Forum 2025, organized by VietnamBiz and Vietnam Moi, was held under the theme “Unblocking and Breaking Through.”

In the discussion session “Macroeconomic Context and Capital Flow Trends,” Mr. Nguyen Ba Hung, Chief Economist at the Asian Development Bank (ADB) in Vietnam, and Mr. Le Anh Tuan, Investment Director at Dragon Capital, analyzed the impacts of Donald Trump’s second term on the Vietnamese and global economies.

When asked about the main keywords for the Vietnamese and global economies in 2025, Mr. Hung chose the phrases “trade” and “trade war.” On the other hand, Mr. Tuan believed that the keywords were “Trump” and “volatility.”

Mr. Nguyen Ba Hung, Chief Economist at the Asian Development Bank (ADB).

Mr. Hung: Trade Policies of Trump’s Administration Impact Economies with High Openness like Vietnam

Providing further analysis, the ADB Chief Economist for Vietnam stated that the inflation battle of high-income countries has essentially achieved its target, and the trend of decreasing interest rates has become evident.

As evidence, Mr. Hung mentioned that in 2024, the European Central Bank (ECB) lowered interest rates three times, totaling 75 to 110 basis points. The Federal Reserve (Fed) was slower to act but still lowered rates twice, totaling 75 basis points.

Therefore, inflation and interest rate stories are now in the past, and one of the big unknowns in the next phase is the actions of the new US administration.

“The new administration will not necessarily do everything that President Trump promised during the campaign. But surely [his policies] will have an impact on world trade,”

the expert emphasized. He also added that tax increases and the imposition of restrictions could lead to some variables for global trade, including Vietnam.

Explaining his viewpoint further, Mr. Hung stated that the Vietnamese economy has a certain level of openness. Therefore, changes in trade policies, especially in the US market, could pose some challenges. To address this issue, he suggested focusing on stimulating domestic demand, encouraging investment, and promoting foreign investment.

Mr. Tuan: ‘Trump’ is the Keyword Affecting the Global Economy

Similarly, Mr. Le Anh Tuan, Investment Director at Dragon Capital, assessed that Donald Trump’s second term would significantly impact the global economy.

“‘Trump version 2’ is not just about trade; it’s also about monetary policies,” said Mr. Tuan. He explained that when President Donald Trump came to power, there was a high possibility that he would want a strong USD.

“When Trump was re-elected, bond yields immediately surged. This means that when interest rates in the US remain high, our monetary policy space will be limited,” Mr. Tuan added.

Additionally, the expert pointed out that when Trump was projected to win, the Chinese stock market continued to rise instead of falling because Beijing had prepared strong stimulus packages to be deployed based on the election results.

“When China is hit with high tariffs, the likelihood of them devaluing their currency is significant. When China implements this policy, the Vietnamese economy will face unique pressures,” he emphasized.