Hanoi (VNA) – Although Vietnam has recorded strong economic performance in 2025, the country should adopt a more cautious stance in 2026, with a focus on infrastructure investment, productivity gains and market diversification to retain its position as one of Southeast Asia’s fastest-growing economies, according to Suan Teck Kin, Executive Director of Global Economics and Markets Research at Singapore-based United Overseas Bank (UOB).
UOB recently raised its 2025 GDP growth forecast for Vietnam to 7.7%, close to the Government’s 8% target. According to Suan Teck Kin, the revision reflects robust results in the first three quarters of 2025, particularly in manufacturing and exports, placing Vietnam among the fastest-growing economies in ASEAN.
Manufacturing continues to be a key engine, helping Vietnam strengthen its role in regional supply chains. Together, strong exports, improved domestic consumption, a tourism rebound and accelerated public investment underpin UOB’s upgraded growth outlook for 2025, despite expectations of a slight slowdown in the fourth quarter compared with the earlier quarters.
Suan Teck Kin noted that intensified US–China tensions in 2025 have created both opportunities and challenges for Vietnam. On the positive side, supply chain relocation has benefited Vietnam, with exports to the US surging. The US now accounts for about 30% of Vietnam’s total exports, making it the country’s largest market.
The UOB expert noted that foreign direct investment has also exceeded expectations, with disbursed FDI reaching around 23.6 billion USD in the first 11 months of 2025, reflecting investor confidence in Vietnam’s location, labour force and business-friendly policies.
However, Vietnam’s high dependence on exports, equivalent to about 83% of GDP, also heightens vulnerability to a global slowdown, particularly in US demand. Sector-specific tariff risks, especially for furniture and wood products, and labour market pressures from rising wages without commensurate productivity gains, could affect competitiveness and inflation.
UOB forecasts Vietnam’s GDP growth at around 7% in 2026, lower than in 2025 but still the strongest in the region. Suan Teck Kin said a moderate slowdown will help ensure sustainable growth and prevent rising costs.
Infrastructure investment should remain the top priority, spanning transport, ports, logistics, digital infrastructure, education and training to reduce costs and boost productivity. Improving human capital is also critical, ensuring wage growth is matched by productivity gains through skills development, digital transformation, and education improvement.
In addition, greater attention should be paid to social housing, health care and welfare to lower living costs and enhance long-term competitiveness. Finally, both the Government and businesses should accelerate market and product diversification, reducing reliance on electronics and the US market by expanding into Southeast Asia, the Middle East, Africa, Latin America and Eastern Europe, thereby strengthening resilience against global shocks, Suan Teck Kin concluded./.
VNA
