Vietnam upholds 8% GDP growth target despite US tariff turmoil

The Vietnamese Government is persistent with its 8% growth goal though disadvantages outweigh advantages, with a focus on solutions to respond to U.S. reciprocal tariffs, PM Pham Minh Chinh told a cabinet meeting on Tuesday.

The Prime Minister noted that achieving a growth of at least 8% for 2025 requires enormous efforts given challenges, including U.S. tariffs.

"Macro economic management, especially regarding interest rates, exchange rates, and inflation, is under huge pressure amid external turbulences.

"Business activities in many sectors are still difficult, while access to credit remains limited. The number of domestic private firms ceasing operations is still large," he said.

The cabinet leader added that traditional growth drivers have not met government expectations, while new growth drivers are in their early stages and need time to be effective.

Chinh highlighted that administrative procedures are still cumbersome, causing difficulties for businesses and people, while decentralization and delegation of power are not thorough, causing congestion and inconvenience for lower-level officials.

Business confidence in Vietnam dropped sharply in April to the lowest since August 2021, as manufacturers were concerned about the impact of U.S. tariffs on production in the months ahead, according to S&P Global.

The level of optimism was one of the weakest in the series history, the firm said in a release on Monday.

The S&P Global Vietnam Manufacturing Purchasing Managers' Index (PMI) dropped back below the 50.0 no change mark in April, after having signalled growth for the first time in four months during March. At 45.6, the latest reading was down from 50.5 and signalled a marked monthly deterioration in the health of the manufacturing sector.

On a positive note, the Prime Minister said the macro economy was stable in the first four months of the year, with GDP growth higher than last year and major balances of the economy ensured. Budget deficit, public debt, government debt, and foreign debt were all "under control".

Vietnam’s export earnings grew by 13% to $140.34 billion in the four-month period, while import expenditures rose by 18.6% to $40.74 billion, resulting in a trade surplus of $3.79 billion.

The domestic economic sector's export posted a growth rate of 18.1% to $40.74 billion, while that of the foreign-invested sector, including crude oil, rose by 11% to $99.6 billion.

Registered foreign direct investment (FDI) hit $13.82 billion in the four months, up 39.9%, while disbursed capital reached $6.74 billion, up 7.3% and marking a record high in five years.

The consumer price index (CPI) in April increased by 0.07% compared to the previous month, by 1.37% against December 2024, and by 3.12% year-on-year, the General Statistics Office (GSO) reported.

On average, the CPI in the first four months of the year rose by 3.2% year-on-year, while core inflation went up 3.05%.

The food and catering services group had the biggest impact on the CPI as they rose 0.12% month-on-month, contributing 0.04 percentage point to the overall CPI growth.

Gold prices climbed 10.54% in April from the previous month and 37.14% year-on-year. The gold price index rose by 32.85% during January-April compared to the same period last year.

The price of the U.S. dollar moved against the global trend, mainly due to increased domestic demand. In April, the U.S. dollar price index went up 0.97% month-on-month and 3.17% year-on-year, with a four-month average hike of 3.52%.