UOB raises Vietnam’s GDP growth forecast to 6.9%

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

In the first half of this year, Vietnam’s GDP grew by 7.52% year-on-year, the highest rate 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% tariff rate.

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

However, Vietnam'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, Vietnam’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 U.S., 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 U.S. tariffs on Vietnamese goods, UOB has revised its forecast for Vietnam’s exports to that country, now expecting a modest 5% increase, a huge improvement from the previously projected 20% decline.

For other markets, UOB expects exports to grow by 10%, close to the 11.3% increase recorded in 2024. Vietnam’s exports are projected to rise by 8.5% in 2025, a noticeable slowdown compared to the 14% 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 Vietnam’s GDP growth in 2025 will be 0.9 percentage points higher than its initial baseline forecast, reaching 6.9% compared to the previous projection of 6.0%.

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%.