Vietnam’s economy stands at a critical juncture as global economic uncertainties cast a long shadow over its growth prospects. Speaking at the “Opportunities and Challenges in the New Context” workshop held in Hanoi, experts warned that economic slowdowns in major trading partners such as the U.S., China, and Europe could severely impact Vietnam’s manufacturing and export-driven sectors.
Professor Nguyen Mai, chairman of the Vietnam Association of Foreign Invested Enterprises (VAFIE), expressed concerns over Vietnam’s heavy reliance on external demand, emphasizing that lower-than-expected growth in key markets could stifle domestic production and exports. “The backbone of Vietnam’s economy, its manufacturing-processing sector, is at risk if global growth falters,” he said.
Other significant risks include the sluggish recovery of Vietnam’s real estate market and the increasing severity of climate change, which could disrupt critical supply chains. Additionally, the banking sector’s diminished capacity to lend presents a further threat to economic stability, limiting the ability of businesses to access much-needed capital.
Mai proposed a multi-faceted approach to mitigate these risks. This includes significant infrastructure investments to accelerate digital transformation, improving the legal framework to better support businesses, and enhancing the linkages between foreign and domestic enterprises. “Vietnam must attract more investments in digitalization to keep pace with the changing global economic landscape,” he added.
However, not all is bleak for Vietnam. Can Van Luc, chief economist of BIDV, pointed out that while Donald Trump’s potential return to the U.S. presidency could lead to increased trade protectionism, Vietnam’s export revenues to the U.S. are growing rapidly. “The relocation of global supply chains, away from traditional hubs, is already benefiting Vietnam,” Luc noted. Nevertheless, he warned that the country must overcome challenges in attracting investments, particularly in green transition and sustainable development, if it hopes to secure a lasting competitive edge.
Infrastructure investments are emerging as one of the key areas where Vietnam can carve out opportunities amid global turmoil. Nguyen Anh Tuan, vice chairman of VAFIE, highlighted that major projects, such as the Long Thanh Airport and the North-South high-speed railway, are poised to enhance Vietnam’s connectivity and economic capacity. He further stressed that Vietnam must address the outdated legal frameworks governing land and real estate to unlock the potential for growth in these sectors.
The workshop also underscored the importance of business adaptability in the face of changing global trends. Dr. Vo Tri Thanh, director of the Institute for Brand and Competitiveness Strategy, recommended that Vietnamese companies adopt a proactive approach to identify opportunities in sustainable growth and green economies. “Confrontation and fragmentation in the global economy are reshaping supply chains, but this also opens doors for those ready to innovate,” Thanh said.
He emphasized that businesses should not only react to the challenges but also seek out collaborations with more advanced enterprises to enhance their competitiveness. Environmental, social, and governance (ESG) factors are becoming increasingly important in shaping consumer preferences and market dynamics, and firms that prioritize these principles are likely to benefit in the long run.
In conclusion, while Vietnam faces a complex array of challenges, it also has significant opportunities for growth if businesses and policymakers alike take decisive action. By embracing digitalization, upgrading infrastructure, and adopting sustainable practices, Vietnam can not only weather the current storm but emerge stronger in the rapidly evolving global economy.
