UOB: Vietnam’s economy is ‘resilient’

The comment was stated in the newly released report of UOB Bank (Singapore), after GDP in the first quarter increased by 7.83% over the same period in 2025, exceeding this bank’s forecast (7%) and Bloomberg survey (7.6%).

According to the Bank of Singapore, the growth driver comes from the manufacturing, construction and service sectors, supported by strong export demand (up 19.1%). Along with that, realized FDI capital flows increased by 9.1%, reaching 5.41 billion USD.

UOB assesses the short-term outlook as a mix of both positive and challenging, as rising energy costs begin to put pressure. The bright spot is that the manufacturing sector continues to expand as the PMI and output indexes maintain increasing momentum.

However, the consumer price index increased by 5.6% in May. Along with that, exports slowed down while imports increased, causing the 5-month trade balance to reverse its deficit. According to data from the Statistics Department (Ministry of Finance), Vietnam’s trade deficit was nearly 14 billion USD in the first 5 months of the year, while the same period last year had a trade surplus of 5.1 billion USD.

With the need to import machinery to serve infrastructure and the possibility of high oil prices, according to UOB, pressure on the balance of payments will still remain.

This bank forecasts that Vietnam’s GDP in the third quarter will increase by 7.1%. Average growth in the second and third quarters was about 6.7%, considered the “most difficult period” this year.

Assessing that the risks of US energy prices and tax policies are still significant, UOB maintains its forecast that GDP in 2026 will increase by 7% and believes that the State Bank of Vietnam is likely to keep the operating interest rate unchanged.

On April 24, the National Assembly passed a Resolution setting a growth target of 10% per year by 2030, putting Vietnam in the group of 30 economies with the world’s leading GDP. According to UOB, this is a “highly ambitious” medium-term goal.

Regarding exchange rates, UOB believes there are signs of more stability in recent weeks. However, it is likely that VND will still be under short-term pressure, similar to regional currencies, due to prolonged geopolitical instability. The USD/VND exchange rate is forecast to gradually depreciate in a controlled manner, at 26,500 and 26,400 in the third and fourth quarters, respectively.