Fears of recession and inflationary pressures in Vietnam have subsided, with consumers beginning to increase spending on experiences and travel, according to the ASEAN Consumer Sentiment Study 2024 recently released by Singapore-based United Overseas Bank (UOB).
The study, conducted by UOB in collaboration with global management consultancy Boston Consulting Group, analysed consumer sentiment and trends in Singapore, Malaysia, Thailand, Indonesia, and Vietnam.
The findings show that Vietnamese consumers are optimistic about short-term economic stability. Concerns about a recession over the next six to 12 months have dropped seven per cent compared to the same period last year.
Vietnamese consumers are also the most optimistic in the region about their finances, with 90% expecting to be financially stable or better off by June 2025, ahead of Indonesia at 89% and Thailand at 82%.
The cooling of global inflation has eased imported inflationary pressures in Vietnam, with the average import price index falling 1.73% in January-September compared to the same period last year. Lower global oil prices have positively impacted Vietnam’s consumer price index, which remained under control at 3.9% in the third quarter, below the government’s target of 4-4.5%.
Over the past year, Vietnamese consumers have increased spending on essential items, particularly in children’s education at 42%, healthcare at 33%, and utilities at 33%. Vietnamese consumers have spent more on experiences, such as vacations, fine dining, concerts, and festivals, compared to their regional peers. Forty-two per cent of the respondents in Vietnam reported increased spending in these categories, higher than the ASEAN average of 35%.
Younger consumers, especially Gen Z, or those born between 1997 and 2012, are spending more on experiences, with 47% of them reporting more spending on experiential activities. The study also found that nearly 60% of Vietnamese consumers have set aside at least three months’ worth of emergency expenses, higher than the regional average of 54%.
Nearly half of the respondents said they regularly save more than 20% of their monthly income, and 63% of Gen Y, born between 1981 and 1996, are highly engaged in investments, allocating more than 10% of their annual income to such investments – 10% more than the regional average.
Vietnamese consumers are also becoming more selective with their spending, favouring discount packages in e-commerce and increasingly planning for retirement, primarily through savings accounts and fixed deposits.
However, UOB’s research also highlights a gap in insurance coverage. While 86% of Vietnamese consumers have basic health insurance, only 15% have critical illness insurance, lower than the regional average of 24%. Furthermore, only 13% have death and total permanent disability insurance, also below the regional average. – Tuoi Tre News
