UOB raised Vietnam’s GDP growth forecast for 2025 to 7% and said that the Government’s target of at least 8% is ambitious but still feasible.
The recently released report of United Overseas Bank (UOB) raised Vietnam’s GDP growth forecast this year to 7% from the previous level of 6.6%. The decision came after the economy grew 7.09% last year, far exceeding the overall market forecast of 6.7% and the official target of 6.5%.
“We expect positive changes from domestic drivers such as production, consumer spending and tourist arrivals to contribute to activities, especially in the first half of the year,” the report said. the report stated.
These factors resonate with the external situation being viewed more positively. UOB expects the US government – Vietnam’s largest export market – to apply additional tariff policies in a more calculated and flexible way.
Workers of Tan Thuan Export Processing Zone (HCMC) during production hours in March 3023. Image: Le Tuyet
In 2025, the National Assembly sets a growth target of 6.5-7%, while the Government expects at least 8% or 10% under favorable conditions, creating double-digit growth momentum for the next period. to become a high-income country by 2045.
According to the bank from Singapore, based on the approach focused on financial discipline and the way public investment has been disbursed to date, the 8% target “seems quite ambitious but there is still room to achieve”. .
At the Government’s regular press conference on January 8, Deputy Minister of Planning and Investment Nguyen Duc Tam said there is a basis for this year’s economic growth of 8%. According to him, innovation and institutional improvement continue to be one of the important driving forces to help growth achieve high results. Along with that, public investment was also focused on disbursement right from the beginning of the year. Traditional growth drivers such as consumption and export are also focused on strengthening and renewing by the Government.
Regarding challenges, UOB believes that uncertainty about trade prospects will be a major risk for Vietnam in the second half of the year. Because the economy is increasingly dependent on exports, which have increased to a record high of more than 400 billion USD by 2024, nearly equal to the nominal GDP size of 450 billion USD.
Exchange rate pressure is still present. The USD is forecast to strengthen further in the first half of the year, after the return of Donald Trump. International markets have adjusted expectations, with fewer interest rate cuts by the US Federal Reserve (Fed), meaning USD strength continues to consolidate.
Meanwhile, VND will likely be affected by Mr. Trump’s tariff policy, the trend of the yuan and the Fed’s interest rate policy. UOB forecasts the USD/VND exchange rate at 25,800 VND in the first quarter, 26,000 in the second quarter, 26,200 in the third quarter and 26,000 in the last three months of the year.
With uncertainty about the Fed’s interest rate adjustment cycle and geopolitical/trade tensions, the bank expects the State Bank to keep the policy interest rate unchanged at 4.5%.