Hanoi (VNA) - Vietnam is widely recognised by international financial institutions as a bright spot of regional growth despite ongoing global economic uncertainties, with GDP growth of 7.5% in the first half of 2025, laying a solid foundation for the Government’s full-year target of 8.3-8.5%, and reinforcing confidence in sustainable prospects.
In their September reports, major international bodies unanimously highlight Vietnam’s impressive economic momentum. While projections for 2025-2026 vary, reflecting cautious assessments of global risks, optimism remains strong.
The Asian Development Bank (ADB) upgraded its 2025 growth forecast to 6.7%, emphasising robust recovery in industry and construction. Singapore's United Overseas Bank (UOB) expressed even greater optimism, raising its forecast to 7.5% and projecting Vietnam’s potential for sustained long-term growth averaging 7%, provided reforms continue.
Conversely, the World Bank (WB) and International Monetary Fund (IMF) offer more conservative outlooks, forecasting 6.6% and 6.5% growth respectively for 2025. The IMF warns that growth could ease to 5.6% in 2026, primarily due to the US's new tariff policy.
Despite differing figures, these institutions agree Vietnam possesses strong fundamentals to maintain vigorous growth. A key concern is the US’s new tariffs, which impose 20% duties on goods directly imported from Vietnam and 40% on “transshipped” products, starting from August 7, 2025. Ambiguities in the definition of transshipment are pressuring key export sectors.
The WB estimates that between 1.6% and 10.6% of Vietnamese exports to the US could be affected if broad interpretations prevail. Indeed, exports to the US fell by 2% in August, impacting textiles, wood, and machinery.
Additional risks include economic slowdowns in the US and China -Vietnam’s largest trading partners- and prolonged geopolitical tensions in Europe and the Middle East. UOB notes the Vietnamese dong’s 3.4% depreciation year-to-date highlights ongoing currency pressure amid high interest rate differentials between the US dollar and Vietnamese dong.
Nonetheless, most international observers regard these as short-term challenges that Vietnam’s intrinsic resilience can offset, provided macroeconomic stability and flexible policy management continue.
Domestic growth drivers
Vietnam’s economy is buoyed by strong internal drivers. Exports surged 14.2% in the first half of 2025, while foreign direct investment (FDI) disbursements hit 15.4 billion USD, the highest in five years, focused on high-tech, renewable energy, and manufacturing sectors. Large projects from Japan, the Republic of Korea, and Europe are not only injecting capital but upgrading domestic production value chains.
Private consumption, accounting for over 65% of GDP, remains a key pillar, supported by controlled inflation at around 3.3%. Service sectors, retail, tourism, and real estate are experiencing robust recovery, with nearly 14 million international visitors in the first eight months of 2025, up almost 30% year-on-year.
Agriculture, while a smaller GDP component, continues to play a vital role in social stability and food security. International reports, including from UK Investor Magazine, commend Vietnam’s agricultural success as evidence of its adaptability and resilience in economic transformation.
Vietnam’s fiscal space also receives praise. With public debt below 34% of GDP, which is well under the 60% ceiling, the government retains substantial room for fiscal stimulus. Infrastructure investment plans worth 48 billion USD across over 250 projects are accelerating disbursement, promising widespread economic impact.
Monetary policies are expected to become more accommodative later in the year, with some banks forecasting potential interest rate cuts to support businesses. The IMF advocates for a wider, more flexible exchange rate band to ease external pressures while maintaining stability.
International institutions stress that if Vietnam sustains institutional reform, improves the business environment, and accelerates digital transformation, the long-term growth target of 7% is achievable. The sustained reforms should focus on enhancing domestic business competitiveness, reducing overreliance on FDI, and increasing investment in education, particularly in STEM fields and R&D,
With a strong 7.5% GDP expansion in the first half of 2025 and international confidence, the government’s 8.3-8.5% growth target for 2025 is widely regarded as achievable. Shantanu Chakraborty, ADB’s Country Director for Vietnam, highlights that effective fiscal and monetary policy coordination, alongside addressing structural challenges like climate change and energy transition, will help Vietnam build a balanced and sustainable growth model.
International confidence, coupled with steadfast policy management, positions Vietnam to consolidate its status as one of Asia’s fastest-growing and most stable economies./.
