UOB Study: Vietnamese consumers most optimistic in ASEAN on economic outlook, outpacing in overseas spending
Ho Chi Minh City, Vietnam, 7 November 2024 - Vietnamese consumers showed the highest level of optimism regarding their country’s economic outlook compared with their regional peers, according to UOB's ASEAN Consumer Sentiment Study (ACSS) 20241.
UOB’s flagship regional study showed over 70 per cent of Vietnamese respondents expressing confidence in the country's economic performance for the next six to 12 months2, with the positive sentiment following Vietnam's strong economic recovery in the first half of 2024 where Gross Domestic Product (GDP) 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 Vietnam’s full-year GDP growth to 6.4 per cent, up from 5.9 per cent, following a remarkable third-quarter GDP growth of 7.4 per cent.
In addition, with borders reopening post-COVID-19, 71 per cent of Vietnamese respondents said they had spent overseas within ASEAN over the past year, largely on business and leisure trips— a rate surpassing the regional average of 66 per cent and exceeding levels seen in Indonesia, Malaysia, and Thailand.
“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 Vietnam's success in promoting stable economic growth and deepening its regional integration.” said Mr Paul Kim, Head of Personal Financial Services, UOB Vietnam.
“The ACSS insights show that our focus on offering personalised financial solutions and exclusive privileges tailored to customers’ unique needs and wants not just locally, but around the ASEAN region, is the right one. This is how we remain a trusted partner, always striving to do what’s best for our customers.”
Mr Paul Kim, Head of Personal Financial Services, UOB Vietnam at the ACSS launch event in HCM city on 7 November 2024
In its fifth year, the ACSS is UOB’s flagship regional study on consumer trends and sentiments across Singapore, Malaysia, Thailand, Indonesia, and Vietnam. Conducted from May to June 2024, the study surveyed 5,000 respondents across the five countries, including 1,000 from Vietnam. This year’s iteration marks the second time UOB collaborated with Boston Consulting Group on the study.
Easing recession fears and inflation pressures in Vietnam
With Vietnam experiencing robust growth from early 2024, consumers declared greater confidence in the country's near-term economic stability, with a seven percentage point decrease year-on-year in recession concerns over the next six to 12 months2. At 70 per cent, the proportion of Vietnamese respondents confident in the country's economic future was also 18 percentage points above the regional average. 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).
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 Vietnam’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 Vietnam’s consumer price index (CPI), which remains at 3.9 per cent year-to-date - below the government target of 4.0 – 4.5 per cent.
Increased spending on experiences and travel
Over the past year, Vietnamese consumers said they had increased spending on essentials. The top three items Vietnamese consumers said they spent more on were children’s education (42 per cent), healthcare (33 per cent) and utilities (33 per cent). Vietnamese consumers 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. Younger consumers were more partial to experiences, in particular Gen Z with 47 per cent of them saying that they had spent more on experiential purchases.
Regarding overseas spending, over 70 per cent of Vietnamese consumers reported expenditures abroad within ASEAN over the past year, with Thailand and Singapore as the most popular destinations. Among overseas payment methods, 71 per cent of respondents said they preferred using credit or debit cards - either physical or via mobile phones - while cash was preferred by only 38 per cent.
Building on this trend, UOB Vietnam has partnered with top local and regional brands in recent years to offer exclusive privileges for credit card holders in travel and entertainment. These include access to pre-sale ticketing for major regional concerts and festivals, over 1,000 deals on major brands across ASEAN, and special promotional campaigns for cross-border spending. This approach allows the Bank to leverage customer insights to better cater to their evolving needs and preferences.
Savings and investment levels strong, but insurance coverage lags
ACSS 2024 found that 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. 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.
However, insurance coverage remains limited, particularly for critical illness and death and total permanent disability. While 86 per cent of Vietnamese consumers hold basic health insurance, only 15 per cent have critical illness coverage, lagging the regional average of 24 per cent. Additionally, just 13 per cent have death and total permanent disability insurance, four percentage points lower than the regional average.
UOB is committed to supporting its customers at every stage of their lives. The Bank encourages customers to adopt a holistic approach to financial preparedness, and stands ready to help clients seeking assistance in planning their finances. Saving, investing, and ensuring adequate protection are essential at all life stages, and UOB remains committed to support customers in securing and maximising their finances in a sustainable manner.
1 The survey broadly categorises respondents into four age groups, namely Generation Z (18 to 25 years old), Generation Y (26 to 41 years old), Generation X (42 to 57 years old) and Baby Boomers (58 to 65 years old).
2 Starting from June 2024