Vietnamese consumer sentiment outperforms regional averages

Vietnamese consumer sentiment outperforms regional averages. Photo: baodautu.vn

Vietnam's economy is growing at a healthy rate, with the World Bank forecasting GDP growth of 6.1 per cent in 2024 and 6.5 per cent in 2025. This is due to a number of factors, including strong exports, rising foreign direct investment, and increasing domestic consumption. In this context, Vietnamese consumer sentiment is positive and outperforms regional averages.

The report pointed out that seven in 10 Vietnamese consumers feel good about current and future economic performance, which is 17 per cent higher than the regional average. A third do not think that recession would hit Vietnam in the next 6-12 months, higher than the regional average. On personal finances, nine in 10 Vietnamese consumers expect to be in the same or better financial position next year.

However, Vietnamese respondents are not immune to monetary concerns. Like many of their ASEAN neighbours, they worry about inflation and rising household expenses. The fear of rising prices may be fuelled in part by the government-mandated wage increase in July 2024. Nonetheless, respondents remain upbeat, with fewer people expressing these concerns as compared to last year.

Work-related concerns, especially the possibility of pay cuts, loss of bonuses, or job loss, are also on the minds of Vietnamese respondents. The top three financial concerns include the inability to put aside money for savings (33 per cent), maintain one’s current lifestyle (32 per cent), and taking care of parents' financial and healthcare needs (30 per cent). Gen Z and the Mass segment are most concerned about work-related and financial issues.

According to UOB, Vietnamese respondents still feel the pinch, with many reporting that their spending has increased on essentials. A significant group of consumers is also spending more on child education (42 per cent), healthcare (33 per cent), and utilities (33 per cent). Budget allocation for expenses has increased from the previous year, particularly among Mass Affluent consumers.

In response, half of Vietnamese consumers are spending less on non-essentials. For example, more than two in five (44 per cent) are looking for discounts and offers to save on expenses. Meanwhile, 37 per cent have begun seeking a secondary source of income.

Despite rising expenses, Vietnamese consumers are putting more money into savings (32 per cent) and investments (36 per cent), and less into mortgages. Almost half of Vietnamese consumers save at least 20 per cent of their monthly income, 6 per cent higher than the regional average.

The findings show that 91 per cent of respondents have an emergency fund, with 58 per cent having savings that could cover expenses for three to six months (vs. 54 per cent regionally). Notably, Gen Z consumers are saving more than the other age groups.

Vietnamese consumers are also financially savvy, with 63 per cent of respondents investing more than 10 per cent of their annual income. This exceeds the regional average by 10 percentage points. Investing is particularly common among Gen Y and Mass Affluent consumers.

Many have also started planning for their later years, with a good number (73 per cent) having at least a fair understanding of the amount needed for a comfortable retirement. A significant majority (93 per cent) have started saving for retirement, surpassing the regional average of 89 per cent. Provident fund/life insurance benefits nomination and lasting power of attorney are the most popular legacy planning tools among Vietnamese people.

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