Macroeconomy

• Industrial Production Index (IIP) in July continued its upward trend, with a growth of 0.5% MoM and 8.5% YoY. A positive development is that the PMI has rebounded after three months, reaching 52.4 points — the strongest improvement in nearly a year. With this more positive trend in the PMI in July, the IIP is expected to show more robust growth in the coming months. In addition, new tariffs with the US took effect on August 7, with Vietnam’s tariff rates significantly lower than those announced on April 2. The gap between Vietnam and other US trade partners has also narrowed in a way that is more favorable for Vietnam. We believe that new orders will continue to recover, thereby supporting positive industrial production growth in the remaining months of the year;
• The total retail sales of goods and consumer services in July were estimated at VND 576.44 trillion, an increase of 9.16% YoY. Consumption remains below expectations and the 12% growth target set out in Resolution 154. However, the outlook for the final months of 2025 is assessed to be more positive, thanks to various supporting factors, including fiscal policy, monetary policy, and easing pressure on living costs. That said, given the still-weak consumption base in the first half and the lag in the impact of support policies, achieving the full-year domestic consumption growth target of 12% for 2025 remains challenging;
• Regarding public investment, state budget-funded investment in July reached VND 76.481 trillion, up 7.01% MoM and 34% YoY. In 7M2025, the total value of public investment disbursement reached VND 378.288 trillion, fulfilling over 40% of the annual plan and marking a 25.68% year-on-year increase. Disbursement momentum in the past three months has accelerated significantly compared to the early part of the year, with growth rates of 32–34% YoY. This indicates a sustainable improvement trend, forming a solid foundation for the expectation that disbursement progress will continue to be boosted in the remaining months of the year, aiming to achieve 90–100% of the annual target;
• CPI rose by 3.19% YoY in July. Inflationary pressure has eased compared to the last two months. We maintain our forecast that the full-year CPI (Consumer Price Index) will increase within the range of 3.5-4%,
• As of August 5, 2025, the VND depreciated by 2.85%. The pressure from the USD is expected to ease in the coming period as the Fed implements interest rate cuts, which will help reduce pressure on other currencies, including the VND. We believe that the VND will experience more stable fluctuations moving forward and maintain our forecast that the VND will fluctuate within a 3% range for the entire year of 2025.

Stock market

• The market reacted well when the US announced a retaliatory tariff of 20% for Vietnam.
• VN-Index rose by 126.5 points, equivalent to a 9.19% increase compared to the end of June, reaching 1,502.52. The 20% retaliatory tariff on Vietnamese goods helped create a positive sentiment in the market, with the upward momentum spreading across various sectors.
• The average trading value on all three exchanges in July reached VND 39,492 billion, representing a 68.31% increase from June. Domestic capital inflows continued to be supported by low interest rates, and investor sentiment improved as the 20% retaliatory tariff was not more unfavorable than that of other countries.
• Foreign investors returned to net buying in many emerging Asian markets in July, driven by expectations that tariff-related risks would ease. The focus was primarily on the Financial Services, Banking, and Real Estate sectors — the industries that attracted the most foreign capital.
• We believe the market is likely to maintain a positive trend in August, as it is supported by several favorable factors.