VINACHEM

The Singapore-based United Overseas Bank (UOB) revised its forecast projection for Việt Nam’s GDP growth upward to 6.9 per cent for 2025 from its previous projection of 6 per cent, following the strong performance in the second quarter.

According to a report released by UOB's Global Economics & Market Research Unit released on July 8, Việt Nam’s real GDP grew by a robust 7.96 per cent year-on-year in the second quarter of 2025, significantly exceeding Bloomberg’s forecast of 6.85 per cent, UOB’s projection of 6.1 per cent, and the revised growth figure of 7.05 per cent in the first quarter.

In the first half of 2025, Việt Nam’s GDP grew by 7.52 per cent year-on-year, the strongest performance in H1 since data became available in 2011.

This robust growth was largely driven by businesses accelerating export orders during the 90-day window in which the US temporarily suspended reciprocal tariffs, opting instead for a basic 10 per cent tariff rate.

In H1, Việt Nam’s export turnover rose by 14.4 per cent compared to the same period last year, hitting $219 billion, while imports increased by 17.9 per cent to $212 billion. These figures are nearly equivalent to the full-year growth rate recorded in 2024.

However, Việt Nam's Purchasing Managers' Index (PMI) indicates that the manufacturing sector has yet to return to a solid growth trajectory. Over the past seven months, the PMI fell below the 50-point threshold six times, signaling ongoing challenges facing the sector, particularly due to a decline in new orders.

According to S&P Global, Việt Nam’s export orders in June dropped at the sharpest pace since September 2021, matching the decline recorded in May 2023.

With recent positive developments in trade negotiations with the US, UOB experts predicted that the worst may be over for Vietnam, but tariffs remain a significant barrier for the country.

In light of the newly adjusted US tariffs on Vietnamese goods, UOB has revised its forecast for Việt Nam’s exports to the US, now expecting a modest 5 per cent increase, a significant improvement from the previously projected 20 per cent decline.

For markets outside the US, UOB expects exports to grow by 10 per cent, close to the 11.3 per cent increase recorded in 2024. Việt Nam’s exports are projected to rise by 8.5 per cent in 2025, a noticeable slowdown compared to the 14 per cent growth seen the previous year.

Based on these assumption, and after factoring in the impacts on manufacturing and FDI inflows, UOB's Global Economics & Market Research Unit estimated that Việt Nam’s GDP growth in 2025 will be 0.9 percentage points higher than its initial baseline forecast, reaching 6.9 per cent compared to the previous projection of 6.0 per cent.

Regarding monetary policy, UOB said that the positive economic growth performance may have eased the pressure to further loosen policy. As a result, the bank expects the State Bank of Vietnam to maintain its current policy rates, with the refinancing rate held steady at 4.5 per cent. — Source: VNS