Hanoi (VNA) - Despite risks from tariffs and currency volatility, Vietnam’s economy continues to demonstrate resilience, with strong export performance and dynamic investment inflows prompting Singapore’s United Overseas Bank (UOB) to upgrade its 2025 GDP growth forecast to 7.5%, up from 6.9% previously.
According to the latest economic outlook released on September 17 by UOB’s Global Economics & Markets Research unit, Vietnam's robust exports and steady FDI growth are supporting confidence in its sustainable recovery amid global uncertainty.
Strong performance despite external headwinds
UOB analysts highlighted that July data reflected continued momentum, even as tariff-related risks linger. Exports in July rose 17% year-on-year, hitting a record 42.3 billion USD, bringing year-to-date growth to nearly 16%. However, the trade surplus dropped to 9.5 billion USD in the first seven months, compared to 14 billion USD a year ago, due to rising imports.
Exports for the full year are projected to grow around 10%, compared to 14% in 2024, assuming moderate monthly increases of 1%–5% for the rest of 2025.
Other indicators also point to resilience. The country’s Purchasing Managers' Index (PMI) rebounded to 52.4 in July after three months below 50, while industrial production rose 9% year-on-year.
Disbursed FDI reached 13.6 billion USD in the first seven months, up from 12.6 billion USD in the same period last year, indicating full-year inflows could surpass 20 billion USD (compared to 25.4 billion USD in 2024).
In response to external challenges, Vietnam announced a 48 billion USD infrastructure investment plan in mid-August, covering 250 projects. The government will fund 129 projects totalling 18 billion USD, mainly in urban development and transport. The remaining 121 projects (30.5 billion USD) will seek funding from other sources, including foreign investors.
Upgraded growth outlook
“Following a strong 7.5% GDP growth in the first half of 2025 and expectations of rising public investment, we are revising our full-year growth forecast to 7.5%, up from 6.9%, compared to 7.09% in 2024," an UOB analyst stated. The bank expects the third quarter’s growth at 7.6%, and at 7.2% in the fourth quarter. The 2026 growth forecast remains unchanged at 7%, while the government aims for 8.3%–8.5% this year.
Inflation has yet to ease significantly. By July, cumulative inflation stood at 3.3%, slightly lower than the 3.6% average in 2024, but driven mainly by housing and construction materials (+5.9%, 18.8% weight) and healthcare services (+18%, 5.4% weight).
Given the stable growth outlook and exchange rate pressures, UOB expects the State Bank of Vietnam to hold the refinancing rate at 4.5%. In a downside scenario of sharply weakening economic indicators, the central bank might consider cutting it to 4%, the record low seen during the pandemic—though this is not UOB’s base case.
In contrast to regional trends, the Vietnamese dong (VND) weakened to a record 26,436 VND/USD in August, down 3.4% year-to-date, marking a fourth consecutive year of depreciation.
Although the US has reduced some tariffs from 46% to 20%, uncertainty remains regarding the 40% tariff on transhipped goods. This could force manufacturers to reconsider supply chain strategies, potentially weakening Vietnam’s attractiveness to foreign investors.
Looking ahead, UOB expects the VND will not fully benefit from the expected weakening of the USD when the Fed begins rate cuts. However, stronger GDP growth may partially support the currency.
UOB also revised its DXY (Dollar Index) forecast down to 96.3 in Q4 2025 and 93.9 in the third quarter of 2026.
After consolidating below 3,400 USD/oz since May, gold has resumed its upward trend.
A notable new factor is increased buying by Chinese investors, as evidenced by gold inventory on the Shanghai Futures Exchange (SHFE) doubling in the past two months.
Technically, gold prices have broken above a key resistance at 3,500 USD/oz. As a result, UOB raised its gold price forecasts to 3,700 USD/oz by Q4 2025 and 4,000 USD/oz by Q3 2026./.
