Vietnam's appeal as a tourist destination continues to grow, with the country welcoming over two million international visitors in January, a record high for a single month. This marks a nearly 40% year-on-year increase, according to HSBC’s latest Vietnam at a Glance report.

Notably, the number of mainland Chinese tourists more than doubled compared to January 2024, narrowing the gap with pre-pandemic levels from 36% last year to just 10% in January 2025.

The report highlighted that the Lunar New Year (Tet) arrived early this year, bringing a nine-day holiday—two days longer than in 2024. This significantly impacted economic data as workers returned home for celebrations. Retail sales rose 10% year-on-year, with both goods and services seeing strong growth. However, spending remains 8% below trend levels, indicating room for further recovery.

On the external front, January trade data appeared weak due to factory closures for Tet. However, after adjusting for seasonal distortions, the 4.3% year-on-year export decline was relatively moderate. Economists noted a divergence in electronics shipments, with phone exports weighing on overall performance while computer and electronics exports provided a strong boost. The trend was also evident in imports, reflecting Vietnam’s import-intensive manufacturing sector.

Despite a 2.6% year-on-year drop in imports, Vietnam posted a robust trade surplus of over US$3 billion in January, well above the 2024 monthly average of US$2 billion. However, trade prospects remain uncertain due to tariff risks. Experts warned that Vietnam faces the highest tariff exposure in ASEAN, given its large trade surplus with the US. While short-term factors influence supply chain decisions, Vietnam’s status as a global production hub is underpinned by strong fundamentals beyond geopolitical shifts.

Meanwhile, inflation rose 1.0% month-on-month in January, pushing the annual rate to 3.6%, surpassing market expectations (HSBC: 3.0%; Bloomberg: 3.1%). The increase was mainly driven by higher food and medical costs (up 9.5% month-on-month). Despite the uptick, experts view these factors as seasonal or one-off and do not see inflation as a major concern for now.

Vietnam back as ASEAN’s growth star: HSBC

Vietnam has regained its position as the “growth star” of the Association of Southeast Asian Nations (ASEAN), said the Hong Kong-Shanghai Banking Corporation (HSBC) when evaluating Vietnam’s economic development in 2024.