Hanoi (VNA) - Standard Chartered, a leading international bank, has predicted that Vietnam’s economy will grow by 6.7% year-on-year in 2025, with 7.5% to be expected for the first half and 6.1% for the second.
In a report on the Vietnamese economy released on February 2, the British bank held that this growth is expected to be driven by rising business activity and sustained foreign investment.
Vietnam’s GDP was estimated to expand 7.1% in 2024, surpassing the Government’s 6.5% target, thanks to supportive monetary policies and strong retail sales. However, recent data indicates a slowdown, particularly in real estate, a sector that continues to face challenges despite early signs of recovery.
Inflation stood at 3.6% in January 2025, marking the sixth consecutive month below 4%. According to the General Statistics Office, transport and food price increases during the Lunar New Year were the primary drivers of inflation. Inflationary pressures could rise in 2025 due to higher costs in health care, housing, construction materials, and food. The central bank may face challenges if inflation picks up in the second quarter, potentially complicating efforts to revive the economy. Economists at Standard Chartered predict that the Consumer Price Index (CPI) will continue to rise in the coming years.
Other key macroeconomic indicators for January show adjustments in both domestic and international data, although electronics exports continue to improve.
Vietnam maintains a large trade surplus with the US, but may face closer scrutiny in the future. While the trade balance remains stable, several risks remain. The monthly trade surplus has been narrowing recently, thus proposed regulatory changes could disqualify some imported goods from being labelled "Made in Vietnam". This will affect supply chains, and the global shift in manufacturing to Vietnam could raise concerns about oversupply and price pressures.
The Vietnamese dong (VND) remains tightly controlled, limiting short-term exchange rate volatility. Despite a fiscal deficit averaging around 2% of GDP over the past two decades, Vietnam’s economy has remained on a solid growth trajectory. The central bank may need to boost foreign exchange reserves to prevent the VND from appreciating too much.
Tourism is expected to be a key growth driver, with a rise in international visitors and the return of Chinese tourists. Credit growth is forecast to reach 16.0% in 2025, following a 15.1% increase in 2024, although lending activity remains cautious.
Tim Leelahaphan, Senior Economist for Vietnam and Thailand at Standard Chartered, said that the Vietnamese government is focusing on driving stronger economic growth, which may help keep interest rates low in the short term. However, he expected interest rates to gradually return to normal levels in Q2, with the State Bank of Vietnam likely to raise rates by 50 basis points. Inflation, US Federal Reserve policies, and movements in the VND will be crucial, with the central bank’s monetary decisions being key to maintaining economic stability and growth in 2025. To ensure sustainable growth, Vietnam needs to diversify its economy and strengthen its resilience to natural disasters, he asserted./.
