Vietnam’s balance of payments has improved thanks to cyclical factors, but exchange rate pressure from U.S. dollar demand—particularly for debt repayments and capital outflows—remains. The exchange rate outlook for the end of 2025 will depend heavily on trade surpluses, remittances, and the global trade environment. Short-term bright spot: a cyclical surplus After five consecutive quarters under pressure, Vietnam’s macroeconomy has recently seen a positive sign: the balance of payments has shifted into a mild surplus. The main driver is a current account surplus supported by trade surpluses. The trade improvement in Q2 2025 is largely a “short-term signal” rather than a sustained shift. This rebound is cyclical, tied to companies ramping up exports to avoid new tariff barriers. Once this effect fades, trade prospects may weaken as global demand remains sluggish, U.S. and European imports decline, and China—Vietnam’s largest partner—has yet to fully recover from its real estate troubles. An IMF report in mid-September 2025 provided a broader picture: the current account is projected to remain in surplus this year at around 4% of GDP. However, the capital and financial account is expected to show a deficit of nearly 4.8% of GDP, reflecting capital outflows. Foreign reserves have fallen to […]