Q1 GDP reached the highest level since 2019: Vietnam’s GDP growth reached 6.93% YoY (Q1 2024: +5.98% YoY) – the highest figure in five years. This result was in line with our expectation. However, the figure remains below the Government’s Q1 target of 7.7%, which may present challenges in achieving the full-year growth goal of 8% for 2025.

- Solid Q1 2025 production growth led by manufacturing: In Q1 2025, the overall IIP increased by 7.9% YoY (Q1 2024: +5.7% YoY), primarily driven by a 9.5% YoY expansion in manufacturing (Q1 2024: +5.9% YoY). The March PMI report shows rising domestic orders, signaling sustained production. At the same time, imports surged by 19% YoY in March and 17% YoY in Q1 2025, indicating that firms are actively purchasing inputs for production. In addition, the 90-day pause on reciprocal tariffs may boost US export orders as American firms may accelerate purchasing to build inventories ahead of the potential tariff implementation in July.

- Robust international arrivals in March continued to support retail sales. The total retail sales growth in Q1 2025 increased 9.9% YoY (up from 8.6% YoY growth in Q1 2024), partly supported by a large number of international arrivals – 6 million in Q1 2025. International arrivals, particularly from China, could continue to support to retail sales. To further stimulate tourism and economic growth, the Prime Minister issued Dispatch 34/CD-TTg on April 10, emphasizing measures to promote tourism development. Additionally, the Hung Kings Commemoration Day on April 7 and the upcoming long holiday from April 30 to May 4 are expected to boost domestic demand for transportation and consumption services.

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