Vietnamese consumers most optimistic in ASEAN about economy: UOB

Experts from UOB Vietnam and Boston Consulting Group share findings from the ASEAN Consumer Sentiment Study 2024 in HCM City on November 7. — Photo courtesy of UOB

HCM CITY - Vietnamese consumers showed the highest level of optimism regarding their country’s economic outlook compared with their regional peers, according to a recent study by Singapore’s United Overseas Bank (UOB).

Conducted in collaboration with Boston Consulting Group, the UOB’s fifth annual ASEAN Consumer Sentiment Study (ACSS), released on November 7, assessed consumer trends and sentiments in Singapore, Malaysia, Indonesia, Thailand and Việt Nam.

The ACSS 2024 showed over 70 per cent of Vietnamese respondents expressing confidence in the country's economic performance for the next six to 12 months, 18 percentage points above the regional average. The positive sentiment followed Việt Nam's strong economic recovery in the first half of 2024, where gross domestic product surged by 6.42 per cent, a significant rise from the 3.84 per cent growth a year ago.

UOB's latest economic forecast issued last month also revised the country’s full-year GDP growth to 6.4 per cent, up from 5.9 per cent, following remarkable third-quarter GDP growth of 7.4 per cent.

Vietnamese consumers were also the most optimistic about personal finances, with 90 per cent expecting to be financially stable or better off by June 2025, followed by Indonesia (89 per cent) and Thailand (82 per cent).

“It is encouraging to see Vietnamese consumers leading the region in optimism around local economic conditions, with the upbeat sentiment likely contributing to the exuberance in cross-border spending. This reflects Việt Nam's success in promoting stable economic growth and deepening its regional integration,” said Paul Kim, head of Personal Financial Services, UOB Vietnam.

The regional study indicated that despite recession fears easing from last year, 77 per cent of Vietnamese consumers were still worried about financial-related matters, with Gen Z showing the highest level of concern (87 per cent).

Rising inflation remained the top financial worry, cited by 60 per cent of respondents, followed by increased household expenses (53 per cent). However, these figures represent a six percentage point and nine percentage point decrease, respectively, from last year’s levels, indicating reduced stress around domestic price increases.

Declining global inflation has eased Việt Nam’s import price pressures, with the average import price index for the first nine months of 2024 down 1.73 per cent year-on-year. Lower global oil prices have also positively impacted Việt Nam’s consumer price index, which remains at 3.9 per cent year-to-date - below the government target of 4 – 4.5 per cent.

Increased spending on experiences and travel

Over the past year, Vietnamese consumers had increased spending on essentials, with the top three items that they spent more on being children’s education (42 per cent), healthcare (33 per cent) and utilities (33 per cent).

They also spent more on experiences such as vacations, fine dining, concerts, and festivals than their regional peers, with 42 per cent reporting increased expenditure in these areas compared to the ASEAN average of 35 per cent.

Despite the rise in experiential spending, close to 60 per cent of Vietnamese consumers had set aside at least three months of expenses for emergencies, exceeding the regional average of 54 per cent.

Nearly half of respondents said they regularly save over 20 per cent of their monthly income, driven mostly by Gen Y (those born between 1981 and 1996).

Additionally, appetite for investment was also robust, with 63 per cent of Vietnamese consumers allocating over 10 per cent of their income to investments, 10 percentage points above the regional average.