Vietnam’s Trade Growth Holds Steady as Supply Chains Shift Toward Southeast Asia

Economic

Summary:

Vietnam’s trade reached $514.7 billion in the first seven months of 2025, up 16.3% year-on-year, reinforcing its role in global supply chains despite slower growth in production, FDI, and risks from the global economy....

Trade performance remains resilient

According to Mirae Asset Vietnam, total trade turnover in the first seven months of 2025 stood at $514.7 billion, a 16.3% increase compared with the same period last year, though slightly below 2024’s 18.2% pace. Exports reached $262.4 billion, up 14.8%, while imports rose 17.9% to $252.2 billion. The growth reflects a direct causal link between demand recovery in major markets and Vietnam’s rising trade volumes.

Key export categories continued to post strong gains, including electronics (+41.9%), machinery (+14.6%), and textiles (+11%), while phone exports were nearly flat. Major markets such as the United States, Japan, South Korea, and China all reported higher import demand from Vietnam, highlighting a stable diversification of export destinations.

Customs activity and logistics growth slowing

Customs clearance volumes remained solid but showed signs of deceleration. Total cargo processed in the first five months reached 461 million tons, a 12.8% increase, but far below the 38.9% expansion of the same period in 2024. Export cargo volumes were nearly unchanged at 89.5 million tons, while imports rose 6.6% to 119 million tons.

Container throughput reached 13.2 million TEUs, up 9.3%, but still weaker than last year’s 24.6%. Both exports and imports stood at 4.2 million TEUs, rising 11% and 11.9% respectively. This demonstrates a clear correlation between global trade moderation and slower growth in Vietnam’s logistics activity.

Industrial production and FDI trends

Vietnam’s industrial production index (IIP) rose 8.5% in July from a year earlier, signaling a positive trend. However, the Purchasing Managers’ Index (PMI) only just climbed above 50, pointing to a recovery that remains fragile. Foreign direct investment inflows stayed robust during the first seven months, yet registered capital and project numbers showed signs of stalling, a factor that could weigh on long-term manufacturing expansion.

The global shift toward supply chain diversification is accelerating as firms seek to reduce reliance on one or two major markets. Vietnam is well positioned to benefit thanks to political stability, improving infrastructure, and its participation in multiple free trade agreements. These factors enhance competitiveness and reinforce its attractiveness as a manufacturing hub. The trend is also creating opportunities for logistics and maritime transport as shipping demand rises across Southeast Asia.

Risks from global economic headwinds

Despite the strong trade performance, external risks remain. Potential industry-specific tariffs in certain markets could reduce competitiveness for Vietnamese goods. Additionally, the World Bank has downgraded growth forecasts for several major economies in 2025, raising concerns about weaker global demand. This could indirectly weigh on Vietnam’s export momentum, as softer consumer spending in large markets dampens import demand.

Vietnam continues to ride the wave of global supply chain realignment, with exports, imports, and logistics showing resilient growth in 2025. Yet to sustain this momentum, the country must strengthen its infrastructure, improve business competitiveness, and remain vigilant to external risks stemming from trade policies and slowing global growth.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Gerik

Economic

Commodity

Market movement in early trade

Oil prices slipped slightly in early Asian trading, with Brent crude down 0.11 percent at $66.53 a barrel and West Texas Intermediate for September delivery down 0.09 percent at $63.36. The more active October WTI contract fell 0.14 percent to $62.61. This modest decline came after prices had settled about 1 percent higher in the prior session, underscoring the volatile balance between geopolitical developments and fundamental supply-demand factors.

The immediate catalyst for the decline was news that US President Donald Trump had initiated arrangements for a trilateral summit involving himself, Russian President Vladimir Putin, and Ukrainian President Volodymyr Zelenskiy. The correlation between these talks and oil price movements is significant: the possibility of easing tensions and lifting sanctions on Russian crude would increase global supply availability, exerting downward pressure on prices.

Scenarios shaping market outlook

Analysts caution that outcomes of the talks could influence oil in opposite directions depending on the policy path chosen. Bart Melek of TD Securities suggested that a resolution reducing the threat of secondary sanctions could push Brent toward $58 per barrel in late 2025 and early 2026, reflecting an easing supply constraint. Conversely, if the US opts to apply broader secondary tariffs on buyers of Russian oil similar to recent measures imposed on India this would restrict market access for Russian barrels, likely sending crude back to recent highs. The causal link here lies in how policy choices directly alter the balance of available supply and global demand expectations.

While Zelenskiy described his talks with Trump as constructive, Kyiv and its European allies remain wary that Washington could press for a deal on Moscow’s terms. This uncertainty leaves traders cautious, with markets reluctant to price in a definitive direction until clearer signals emerge from upcoming diplomatic engagements.

Oil markets remain finely balanced between optimism for a geopolitical breakthrough and the risk of policy outcomes that tighten supply. The immediate dip in prices reflects a cautious interpretation of diplomatic progress, but the potential for either easing sanctions or tightening tariffs ensures volatility will persist in the near term.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Rising debt service costs

According to the National Assembly Budget Office and the Ministry of Economy and Finance, government interest payments reached 28.2 trillion won at the end of 2024, marking a 51.4 percent jump compared with 2020. The cost of servicing debt has grown at an average rate of 13 percent annually and is projected to exceed 30 trillion won ($22 billion, or nearly 578 trillion VND) for the first time in 2025. This surge highlights a direct causal link between increased bond issuance to cover fiscal deficits and the soaring cost of interest payments.

South Korea’s total government debt climbed to 1,141.2 trillion won by the end of 2024, up nearly 40 percent from 819.2 trillion won in 2020. Treasury bonds account for 92 percent of this debt, with the remainder spread across housing bonds, foreign exchange stabilization bonds, and other liabilities. Debt service already absorbs a growing share of expenditure, rising from 3 percent of total government spending in 2020–2022 to 4.4 percent last year. This signals an increasingly rigid fiscal structure where a larger portion of the budget is locked into debt obligations.

Refinancing risks intensify

South Korea now risks falling into a debt rollover cycle. In 2025, the government must repay 94 trillion won in maturing bonds, with another 98 trillion won coming due in 2026. Because paying back principal in full is impractical, the government typically issues new bonds to refinance older ones. However, an excessive refinancing burden could depress bond prices and push yields higher, exacerbating the interest bill. Evidence of stress is already emerging: the yield spread between 10-year and 3-year government bonds widened from 0.242 percentage points at the start of the year to 0.343 points in mid-August, showing investor concerns about long-term debt supply.

The government’s expansionary fiscal stance, relying on supplementary budgets financed by deficit bonds, has added to bond market pressures. As short-term yields fall on expectations of central bank rate cuts, long-term yields remain elevated due to fears of mounting issuance. This divergence reflects a correlation between policy-driven debt expansion and investor skepticism about long-term sustainability.

Warnings from experts

Economists caution that South Korea’s accelerating debt trajectory could restrict fiscal maneuverability in the years ahead. As of July 2025, the government had borrowed 113.9 trillion won through the Bank of Korea’s overdraft facility, 8.4 percent higher than a year earlier, underscoring reliance on short-term financing. Scholars argue that even if fiscal stimulus is necessary, it must be directed into sectors that enhance long-term growth potential rather than short-lived boosts, given the growing weight of debt service.

South Korea’s rising debt and interest burden illustrate the structural risks of relying heavily on bond-financed fiscal expansion. With large volumes of pandemic-era debt coming due and refinancing costs climbing, the government faces a narrowing policy space. Unless growth-enhancing strategies can offset these pressures, Asia’s fourth-largest economy risks entering a cycle where borrowing to service old debt constrains its ability to invest in future development.

Source: Korea JoongAng Daily

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Consumer sentiment and rate cuts

The Westpac-Melbourne Institute survey showed a sharp improvement in consumer sentiment in August, reflecting the positive impact of the Reserve Bank of Australia’s third interest rate cut this year. The benchmark rate now stands at 3.60%, and the central bank signaled willingness to ease further if conditions warrant. This policy shift has a direct causal effect: lower borrowing costs reinforced expectations of cheaper mortgages, boosting household confidence and consumption outlooks.

Confidence strengthened across nearly all categories. Household finances compared with a year ago rose 6.2%, while expectations for the next 12 months gained 5.4%. At the broader economic level, the outlook for the next year improved 7.6% and the five-year view rose 5.4%. These improvements illustrate how monetary policy easing correlates with optimism both at the micro level of household budgets and at the macro level of national economic growth.

Implications for retail spending and housing

The survey highlighted encouraging signs for consumption, with the index measuring whether it was a good time to buy major household items climbing 4.2%. More notably, sentiment toward housing rose significantly, with the measure of whether it was a good time to purchase a dwelling surging 10.5% to 97.8, its highest in four years. However, the figure still lags the long-term average of 120, underscoring affordability constraints that limit the causal link between sentiment and actual demand in the property market.

The August survey suggests that the RBA’s rate cuts are successfully restoring confidence among Australian households, helping sentiment recover to its strongest level in over three years. While optimism is improving, particularly in housing and consumer spending, structural issues such as affordability and long-run income growth remain barriers to a sustained rebound. The results nevertheless indicate that monetary policy easing is beginning to stimulate the desired uplift in consumer psychology.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Samantha Luan

Economic

Forex

The Indian rupee is expected to open little changed on Tuesday, defying the dollar's advance against major peers and Asian currencies, with traders noting the local unit has managed to pause its recent weakening trend.The 1-month non-deliverable forward indicated the rupeewill likely open largely unchanged to the U.S. dollar, from 87.35 on Monday.

The rupee, which came near slipping past its all-time low of 87.95 two weeks ago, has since managed to crawl back up.Support has come from the Reserve Bank of India's resolve to prevent the local currency from touching another record low, unwinding of long dollar positions, and more recently, India's planned tax cuts and cautious optimism around the Ukraine-Russia conflict.

The rupee inched higher last week, posting its first weekly advance in over a month, and inched up 0.2% on Monday.The rupee's slide "has been checked for now" and the "bias is now more neutral", a currency trader at a Mumbai-based bank said."Near term, it should stay in a tight range unless fresh triggers emerge from the U.S. tariff headlines."

DOLLAR CLIMBS

The dollar indexrose on Monday and inched up slightly on Tuesday while Asian currencies dipped. Investors weighed signs of progress toward halting the Russia-Ukraine conflict and awaited Federal Reserve Chair Jerome Powell's speech at Jackson Hole on Friday.Ukrainian President Volodymyr Zelenskiy said security guarantees for his country could be finalised within 10 days following talks with U.S. President Donald Trump and European leaders.

A peace deal between Russia and Ukraine would boost overall risk appetite, a positive for the rupee. It could benefit the currency more directly by reducing the likelihood that the U.S. would proceed with additional tariffs on India for purchases of Russian oil, which are scheduled to take effect on August 27.

Source: TradingView

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Forex

Dollar resilience amid geopolitical focus

The dollar index rose 0.31 percent to 98.122, reflecting steady demand for the greenback as geopolitical risks overshadowed markets. The immediate catalyst was the White House summit between US President Donald Trump, Ukrainian President Volodymyr Zelenskiy, and European leaders. Trump pledged that the United States would help guarantee Ukraine’s security in any eventual peace settlement with Russia. This assurance boosted perceptions of US geopolitical influence, which in turn supported the dollar as a safe-haven currency. The causal relationship is clear: heightened global uncertainty increases demand for the dollar as a defensive asset.

Market analysts noted that caution dominates trading behavior. Tina Teng, an independent analyst in Auckland, emphasized that the dollar’s strength coincides with record highs in equity markets, suggesting that risk-on sentiment coexists with safe-haven flows. The euro traded at $1.1667, up a marginal 0.06 percent but still confined to the range it has maintained for the past two weeks. The dollar held at 147.835 yen, close to the upper end of its monthly trading channel, showing a strong correlation between steady US yields and yen weakness.

Attention turning to Federal Reserve guidance

Beyond geopolitics, traders are closely awaiting signals from the Federal Reserve’s Jackson Hole symposium later this week, where Chair Jerome Powell is expected to address the economic outlook and policy framework. With markets already pricing in a high probability of a rate cut in September, Powell’s tone will be crucial in shaping expectations. The relationship here is anticipatory rather than causal: investor positioning reflects forecasts of policy direction rather than confirmed actions.

Trading volumes were light as many investors remained away for northern hemisphere summer holidays, leaving few catalysts beyond geopolitical headlines. Among major currencies, the Australian dollar rose to $0.6495 following stronger Westpac consumer sentiment data, its highest reading in three and a half years. The New Zealand dollar edged up to $0.59245, while sterling recovered to $1.351 after testing the lower end of its recent range.

Cryptocurrency weakness continues

Digital assets diverged from traditional markets, with bitcoin falling 0.3 percent to extend a three-day losing streak after last week’s record high. Ether dropped 0.6 percent, also retreating after failing to breach its previous peak. The correlation suggests that profit-taking and position adjustments are driving crypto moves independently of the broader macroeconomic and geopolitical backdrop.

The dollar’s steadiness highlights how traders are balancing geopolitical risk with monetary policy anticipation. With thin trading volumes, price action remains constrained, but both Ukraine-related diplomacy and Powell’s upcoming remarks at Jackson Hole have the potential to inject significant volatility into currency markets in the coming days.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Forex

Cautious trading in Asia

Asian markets started the week with modest declines as investors braced for the Federal Reserve’s Jackson Hole meeting on August 21–23. MSCI’s broadest Asia-Pacific index outside Japan slipped 0.2 percent in early trading, reflecting subdued sentiment. Japan’s Nikkei hit a fresh intraday record before retreating 0.5 percent, weighed by a sharp 5 percent drop in SoftBank shares after the firm disclosed a $2 billion investment in Intel, a chipmaker struggling with losses. The dollar held firm at 147.78 yen, while the euro remained steady near $1.1658.

In contrast, European futures posted moderate gains, buoyed by signs of diplomatic progress in Ukraine negotiations. Euro Stoxx 50 futures rose 0.3 percent, Germany’s DAX added 0.2 percent, and London’s FTSE gained 0.3 percent. Ukrainian President Volodymyr Zelenskiy said that security guarantees for Ukraine could be finalized within 10 days after meetings with Donald Trump and European leaders. NATO’s Mark Rutte called the talks highly successful, though the Alaska summit between Trump and Vladimir Putin ended without a ceasefire agreement. Trump later suggested a trilateral summit involving himself, Putin, and Zelenskiy is being arranged. The correlation between diplomatic developments and European futures gains highlights how expectations of geopolitical stabilization can support risk sentiment, even without concrete outcomes.

Investor focus on Fed signals

Traders remain cautious ahead of Jerome Powell’s speech at Jackson Hole, which is expected to clarify the Federal Reserve’s policy direction. Current pricing in money markets suggests an 83.6 percent probability of a quarter-point rate cut at the September 17 FOMC meeting. Market behavior shows a causal link between expectations of Fed easing and investor positioning: analysts note that equity strength and dollar weakness hinge on whether Powell signals a dovish shift.

Commodities and currency moves

In commodities, oil prices softened slightly, with US crude dipping 0.2 percent to $63.29 per barrel, reflecting a mix of supply concerns and geopolitical uncertainty. Spot gold traded at $3,334.9 per ounce, edging higher as investors sought a hedge against potential volatility. The dollar index rose to 98.171 after a 0.2 percent gain in the previous session, showing resilience amid cautious risk-taking.

Global markets are caught between cautious anticipation of central bank guidance and tentative optimism about Ukraine peace negotiations. Asian shares reflected investor restraint, while European futures gained on hopes of progress in Washington talks. With Jackson Hole looming, the balance of sentiment will likely hinge on Powell’s tone, as traders weigh geopolitical headlines against the Federal Reserve’s policy outlook.