HCM CITY — Analysts at finance firm VinaCapital said the direct impact from rising geopolitical tensions in the Middle East on Việt Nam’s economy under the baseline scenario is expected to remain limited although the conflict is pushing up global oil prices and safe-haven assets such as gold sharply higher.

According to Michael Kokalari, Director of Macroeconomic Analysis and Market Research at VinaCapital, the conflict is unlikely to significantly affect Việt Nam. Exports to the Middle East account for less than 3 per cent of Việt Nam’s total export turnover, while the likelihood of a large-scale and prolonged ground campaign in Iran is considered relatively low.

VinaCapital views the situation as a more intense version of last year’s “12-day conflict”, meaning tensions may last longer but mainly create a sharp yet short-term shock to global financial markets.

The clearest impact on Việt Nam’s economy would come from higher oil prices. Since the beginning of the year, global oil prices have risen about 30 per cent, potentially pushing Việt Nam’s CPI inflation from around 2.5 per cent year-on-year to nearly 4 per cent in the coming months.

However, fuel accounts for only about 4 per cent of Việt Nam’s CPI basket, while food and foodstuffs – largely produced domestically – make up nearly 36 per cent. As a result, the energy price shock is considered manageable, although higher transport and logistics costs may push up domestic prices.

Higher oil prices could also weigh on GDP growth, as Việt Nam is a net energy importer with net imports equivalent to about 1 per cent of GDP relative to energy consumption. Nevertheless, the Government still has room to offset this impact through growth-supporting measures.

The oil price surge may also be partly cushioned by plans from the Organization of the Petroleum Exporting Countries (OPEC) to raise output from April, while fuel inventories – particularly in China – are reportedly at multi-year highs.

Meanwhile, a stronger US dollar and rising gold prices could put depreciation pressure on the Vietnamese đồng (VNĐ). Combined with higher inflation, this may push 12-month deposit rates up by 50–100 basis points this year to around 7 per cent per year.

In a less favourable scenario where oil prices exceed US$100 per barrel, inflation could rise above 5 per cent and deposit rates climb beyond 7–8 per cent, while GDP growth may fall by about two percentage points.

Higher energy costs would also hit household spending. Currently, Vietnamese households spend about 6 per cent of their total expenditure on petrol and gas. If oil prices rise by around 70 per cent, this share could exceed 10 per cent, forcing households to cut spending on other items.

On the stock market, rising oil prices, shipping costs and interest rates may increase short-term volatility and widen sectoral divergence. Petroleum retailers, oil refiners, oilfield service firms, natural rubber producers, shipping and port operators, as well as fertiliser and gold businesses, may benefit.

By contrast, fuel- and rate-sensitive sectors such as airlines, tourism and real estate could face pressure.

Overall, VinaCapital analysts believed the impact of Middle East tensions on Việt Nam’s economy will likely remain short-term and moderate, while market fluctuations could create opportunities for long-term investors to accumulate stocks at more attractive valuations. — VNA/VNS