Vietnam's economic growth forecast raised to 6.9%
According to data released by the General Statistics Office on July 5, Vietnam's real GDP growth rate in the second quarter of 2025 recovered strongly, reaching 7.96% year-on-year, far exceeding UOB's previous forecast of 6.1%. This figure is also higher than the adjusted level of 7.05% in the first quarter of 2025.
In the first half of 2025, Vietnam's economy grew 7.52% year-on-year, the strongest growth in the first half of the year since data began in 2011.
Vietnam's outstanding growth in the first half of the year was mainly driven by exports boosted ahead of the tariff deadline, which rose sharply by 14% year-on-year, amid a recovery in market sentiment after US President Trump withdrew his tariff announcement on April 2 and instead applied a uniform 10% basic tariff to all trading partners within 90 days of tariff negotiations, according to a newly released UOB report.
In particular, the latest developments in trade negotiations with the US are showing positive signs for Vietnam, after President Trump announced a 20% tax on imports from Vietnam to the US, and 40% on transit goods. "We believe that the most stressful period has passed and forecast export growth in 2025 will be moderate," said a representative of UOB Bank, adding that the bank has adjusted its forecast for Vietnam's GDP growth in 2025 up by 0.9 percentage points to 6.9%.
According to UOB, if the US requires a higher local content ratio, such as 40–50% or even higher, this could be detrimental to Vietnam's nascent manufacturing sector, which relies on an abundant, low-cost workforce than advanced manufacturing technology. On the contrary, if the local content requirement is only 20–30% or lower, this would be a positive signal, allowing businesses to continue operating stably with minimal disruption.
UOB experts say that Vietnam is particularly vulnerable to trade tensions due to the open nature of its economy: exports of goods and services account for 83% of Vietnam's GDP - the second highest in the ASEAN region, after Singapore (182%) - and Vietnam has a high level of dependence on the US market.
In 2024, the US will be Vietnam's largest export market, accounting for 30% of the total export turnover of 406 billion USD, followed by China (15%) and South Korea (6%). The main items exported to the US include: electrical and electronic products reaching 41.7 billion USD, mobile phones and related products reaching 28.8 billion USD, furniture reaching 13.2 billion USD, footwear reaching 8.8 billion USD, knitted goods reaching 8.2 billion USD, and non-knitted textiles reaching 6.6 billion USD. These groups of goods will account for nearly 80% of Vietnam's total export turnover to the US in 2024.
VND will remain low in Q3/2025, recover in Q4/2025
The Vietnamese Dong (VND) was the worst-performing currency in Asia in the first half of 2025, falling 2.5% against the USD.
UOB forecasts that the VND will remain near the low end of its trading range against the USD until the end of Q3 2025. However, by Q4 2025, the VND may begin to recover in line with the general recovery trend of Asian currencies as trade uncertainties ease. Forecast USD/VND exchange rates are: 26,400 in Q3 2025, 26,200 in Q4 2025, 26,000 in Q1 2026, and 25,800 in Q2 2026.
At the press conference to inform about the results of the first 6 months of the year and the implementation of tasks for the last 6 months of 2025 of the State Bank, Director of the Monetary Policy Department Pham Chi Quang said that recently, the USD/VND exchange rate was at its peak of 26,345 VND/USD. Not only did the VND depreciate against the USD, the VND exchange rate against the Japanese Yen or the British Pound also increased. One of the reasons for the VND depreciation is that the State Bank wants to maintain a low interest rate level to support businesses and the economy.
Source: https://phunuvietnam.vn/uob-chinh-sach-thue-van-la-rao-can-lon-voi-viet-nam-20250708162602415.htm
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