Trade Surges Ahead of Tariff Implementation
According to observations by KIS Securities, April witnessed a robust growth in import and export activities, propelled by a rush to expedite orders before the impending US tariff policies took effect. Export turnover surged by 19.75% year-on-year, while imports rose by 22.95%, resulting in a trade surplus of approximately $580 million for the month. Notably, exports to the US soared by 34.33% year-on-year, accounting for over 30% of April’s total export turnover. This highlights the impact of early inventory stocking by US importers during the 90-day tariff suspension period.
However, the outlook is becoming less optimistic. The April PMI report indicated a significant decline in new export orders, suggesting that the current growth momentum may be temporary. Exports are forecasted to face mounting pressures in the coming months, especially once the tariff exemption period concludes.
Figure 1. Vietnam’s Monthly Exports. (Source: General Statistics Office of Vietnam, KIS)
Figure 2. Vietnam’s Exports by Market. (Source: General Statistics Office of Vietnam, KIS)
Temporary Calm Before the Storm
Despite positive industrial production and trade indicators in April, warning signs are becoming more apparent. The industrial production index (IPI) rose by 8.9% year-on-year, but this was a slight decrease compared to the 9.9% increase in the previous month, partly reflecting the less favorable new order situation mentioned in recent PMI reports. Additionally, FDI disbursement witnessed a slowdown, while registered FDI dropped by 8.98% year-on-year. KIS Securities attributes this to foreign investors’ cautious approach to expanding their production and business activities amid ongoing trade negotiations between the US and its major partners, including Vietnam, which have yet to yield favorable outcomes.
Figure 3. Vietnam’s Industrial Production Index (IPI). (Source: General Statistics Office of Vietnam, KIS)
Figure 4. Registered FDI Capital. (Source: General Statistics Office of Vietnam, KIS)
Consumer Spending and Public Investment Accelerate – Bolstering Domestic Growth
Amid uncertainties in the export outlook due to global trade tensions, domestic drivers, particularly domestic consumption and public investment, are playing an increasingly crucial role in sustaining economic growth.
Ho Chi Minh City witnessed a nearly 38% surge in retail revenue, attributed to large-scale anniversary celebrations that attracted locals and tourists alike.
April witnessed a boom in consumer spending and tourism during the two extended holiday periods, especially the 50th anniversary of the Liberation of Southern Vietnam. Total retail sales of goods and services were estimated at over VND 582 trillion, marking an 11.15% increase year-on-year. The surge in shopping, dining, and traveling across the country contributed to the sustained recovery of the retail market. Many localities reported a significant rise in tourist arrivals and service revenues, with Ho Chi Minh City being a notable example with a near 38% jump in retail revenue, thanks to large-scale anniversary celebrations.
Figure 5. Monthly Retail Revenue. (Source: General Statistics Office of Vietnam, KIS)
KIS Securities asserts that alongside robust consumer spending, public investment is also picking up pace. As of April, the total public investment disbursement reached over VND 128.5 trillion, equivalent to 14.32% of the yearly plan and 15.56% of the target assigned by the Prime Minister. Compared to the first quarter, the disbursement progress has significantly improved, closely following last year’s pace. This positive signal indicates that domestic investment resources are gradually becoming more effective. Additionally, inflation remains under control, providing a favorable backdrop for flexible fiscal and monetary policies to support the economy in tackling external challenges in the upcoming period.
The Cement Industry’s Grey Outlook: Can Public Investment Turn Things Around?
The cement industry painted a grim picture in Q1 of 2025, with only a handful of businesses emerging from the red. However, with a boost in public investment and improving market demand, there’s a glimmer of hope on the horizon.
“Six Developers, Zero Disbursement”
Despite favorable conditions, the disbursement of public investment capital in Dak Nong has been low. Alarmingly, six investors have failed to disburse any public investment funds, resulting in a zero-dong disbursement figure.
“Nationwide Commemoration: 80 Mega Projects to Mark 80 Years of Independence”
On the recent 50th anniversary of the liberation of the South and the reunification of the country, 80 major and key projects and programs were inaugurated and launched nationwide. Similarly, on the upcoming 80th anniversary of National Day, the country will continue to inaugurate and launch another 80 significant projects and programs.
Crafting Compelling Content: Navigating the New Tariff Landscape
The US’ reciprocal tax policy towards certain countries, including Vietnam, is an issue of great concern to banks as it directly affects their customers and, consequently, the quality of their assets.
The New Golden Age of Trade: Navigating the Slippery Slope
The economy of Ha Tinh province in April and the first four months of 2025 showed positive signs in retail, tourism, and transportation. However, the province faced challenges due to a downturn in the steel industry, which led to a significant decline in import and export values, largely attributed to its dependence on Formosa.
