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Vietnam's Industrial Output, Retail Sales Cool in May

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Vietnam's Industrial Output, Retail Sales Cool in May

Vietnam maintained its economic expansion in May, posting further increases in industrial output and retail sales, though the pace of growth slowed slightly from the previous month.

The industrial production index grew 8.8% from a year ago, decelerating from April's 9.3% expansion. Similarly, retail sales jumped 11.8% year on year, a slight cooldown from the 12.1% growth recorded in April. On a month-on-month basis, industrial output rose 3.3% and retail sales ticked up 0.5% in May.

For the first five months of the year, industrial production rose 9.1% and retail sales jumped 11.2%.

Analysts consider Vietnam a strong economic performer in Asia, bolstered by its 2025 gross domestic product growth of 8.02%, the second-fastest annual rate since 2011.

"This growth was driven by strong performances in manufacturing, tourism, exports, consumption, and investments, underscoring the country's resilience and positioning it as one of Asia's standout economic performers in 2025, despite challenging trade tensions and tariff actions," according to a March 27 report from McKinsey & Company.

Vietnam's tourism sector remained robust, with international visitors in May climbing 16.5% year on year to 1.78 million.

However, the country is not immune to geopolitical issues, such as U.S. tariff hikes and the Middle East conflict, which has driven fuel prices higher. These factors widened the country's trade deficit in May to its highest level since 1990, surging to $5.21 billion from $3.28 billion in April.

Exports grew 18% year on year to $46.93 billion, while imports came in at $52.14 billion, up 34% year on year.

Vietnam remains vulnerable to global oil price shocks despite the government's introduction of short-term stabilization measures, such as the Fuel Price Stabilization Fund.

"Vietnam's most pressing energy security challenge is not the immediate turbulence in global oil markets, but the country's structural under‑preparedness for future supply disruptions," East Asia Forum's Cuong Nguyen said.

"Oil stocks cover only roughly 32 days of demand, well below the 90-day benchmark set by the International Energy Agency, leaving Vietnam without the buffer to withstand prolonged shocks."

Nguyen suggested that Vietnam should establish a strategic petroleum reserve and adopt a recalibrated growth model to ensure the country's energy security.

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