As Vietnam continues to thrive among Asia’s top destinations for foreign investment, we remain committed to keeping our global audience informed about key developments through the Kenno Vietnam Pulse series.
Since April, Vietnam’s economy has continued to gain momentum with its strongest first-quarter GDP growth in six years, driven by robust domestic consumption and solid FDI inflows. The government initiated trade talks with the U.S., approved a USD 19.5 billion credit package for tech and infrastructure, pushed for further advancement in AI R&D, and launched the KRX trading system supporting the stock market.
The U.S. tariff announcements in early April sent shockwaves through global markets and added uncertainty to the near-term outlook for Vietnam. While volatility impacted the currency (VND -1.7% in April, -2.5% YTD), core macro indicators showed continued strength.
Exports rose by +13% YoY and manufacturing output grew by +10.1% YoY in April, supported by companies ramping up production and shipments ahead of the anticipated end of the 90-day pause before higher tariffs take effect. Disbursed FDI increased by +7.3% YoY in the first four months of 2025, slightly above Q1 levels and not yet showing signs of disruption. We may see slightly lower numbers in the coming months as some companies shift to a wait-and-see mode before the negotiation deadline.
Retail sales maintained +9.9% YoY growth, with the travel and hospitality sectors performing well during the long holiday period. Meanwhile, the government pushed forward with implementation, launching 80 infrastructure projects across 34 provinces with a total value of USD 17.2 billion.
Q1 2025 was Vietnam’s strongest opening quarter in six years, with GDP growth of +6.9% YoY and solid performance across consumption, tourism, and investment. While the external environment has changed meaningfully since early April, Vietnam’s long-term trajectory remains intact. At Kenno, we stay focused on the fundamentals and continue to monitor developments closely. Our conviction in Vietnam’s domestic consumption story is unchanged, underpinned by the country’s adaptability, structural reforms, and resilient middle class.
On April 24, Vietnam and the U.S. officially entered a new round of negotiations on their bilateral trade relationship, with both sides agreeing to pursue further technical discussions aimed at expanding market access and ensuring fair trade policies. This followed a call between U.S. President Trump and Vietnam’s General Secretary To Lam regarding the ongoing reciprocal tariff situation.
Photo: Vietnam News Agency
While we look forward to the specific results of upcoming exchanges, we believe this marks a constructive step toward securing more favorable policies for Vietnamese exports. Meanwhile, the country continues to demonstrate long-term growth potential, driven by its adaptability and strong underlying fundamentals.
The State Bank of Vietnam, in coordination with several commercial banks, recently confirmed a VND 500 trillion (USD 19.5 billion) preferential credit package targeting infrastructure and digital technology firms, aiming to accelerate public investment and promote innovation-led growth. The program will be in effect until 2030 or until the full amount is disbursed, whichever comes first.
Photo: State Bank of Vietnam
We see this as a demonstration of timely and flexible policymaking, considering that credit support remains vital for businesses facing global uncertainties and evolving trade conditions. It also promotes public investment and digitalization, supporting economic growth in both the short and long term.
Qualcomm Technologies has announced plans to build its third-largest R&D center globally in Vietnam—after its major hubs in India and Ireland—focusing on artificial intelligence and semiconductors. This follows the company’s acquisition of a generative AI subsidiary from Vietnam’s VinAI in March 2025.
Photo: Vietnam Government Portal
Alongside the recently announced NVIDIA R&D hub, Qualcomm’s new center further highlights Vietnam’s growing role in high-tech innovation, reflecting a broader shift from manufacturing toward research and development. Our analysts note that it will foster cooperation in R&D, support human resource training, and enable Vietnamese enterprises to integrate more deeply into the global value chain.
The new KRX trading platform officially launched on May 5, generating positive market sentiment and prompting rallies on the VN-Index the same day. Notable IT features being introduced include same-day trading, short selling, shortened settlement cycles, and enhanced order types and trading functionalities.
We view the successful deployment of KRX as a foundational step toward aligning with international practices and improving market operational efficiency. It also supports Vietnam’s ambition to be reclassified from a frontier to an emerging market by global index providers such as FTSE and MSCI — meaning greater access and more investment opportunities for foreign capital.
And that’s a wrap for this month’s edition of Kenno Vietnam Pulse. We hope you enjoyed reading and found valuable insights into Vietnam’s market landscape. Feel free to subscribe to our monthly newsletter more timely, factual, and actionable updates. If you would like closer look at investment opportunities in Vietnam, we invite you connect with us for more information and tailored advice.
Laura Ranin
Disclaimer:
This document is prepared by Kenno Asset Management Pte. Ltd. ("Kenno"), the investment manager for the Asia Top Picks Fund which is open only to professional investors. This marketing communication does not constitute investment advice. Please refer to Kenno’s official fund documents before making any final investment decision. The information provided in this document is accurate as of the time of writing. Kenno does not guarantee the ongoing accuracy or completeness of this information and is not responsible for updates or changes after publication.