According to UOB, Vietnam recorded its strongest quarterly expansion since the post-COVID rebound in the third quarter of 2022, with real GDP growing 8.23% year on year in Q3 in 2025, slightly higher than the 8.19% growth in the previous quarter.

UOB economists noted that the strong performance was underpinned by resilient exports and industrial production, even as the country continued to face headwinds from evolving US trade and tariff policies.

During the January–October 2025 period, Vietnam’s exports surged 16.8% year on year, accelerating from an already high base of 14.2% growth in the same period last year, UOB said.

One key driver was shipments to the US which jumped by 28.1% supported by accelerated orders after reciprocal tariff rates were scaled back to a base rate of 10% globally.

Vietnam’s cumulative trade surplus reached US$18.7 billion as of October, narrowing from US$22.4 billion in 2024, reflecting higher import demand for production inputs amid strong export orders, according to UOB.

Manufacturing activity also strengthened, with output rising 10.8% in January–September 2025, compared with 9.4% growth in the same period in 2024. UOB highlighted that four consecutive months of Purchasing Managers’ Index (PMI) readings above 50 point to a continued expansionary outlook for the manufacturing sector.

Despite volatility in US trade and tariff policies since early 2025, foreign direct investment (FDI) inflows into Vietnam have continued to gain momentum, supported by investor confidence in Vietnam’s medium-term prospects and the broader ASEAN region.

UOB reported that realised FDI inflows reached US$21.3 billion in the first ten months of 2025, exceeding the bank’s full-year expectation of US$20 billion, and well above the US$19.6 billion recorded in the same period in 2024. The FDI pipeline also remains robust, with registered FDI rising 15% to US$31.5 billion, from US$27.3 billion a year earlier, the bank added.

Domestic demand also showed resilience. UOB noted that retail sales expanded at an average of 9.8% in January–October 2025, outperforming the 8.6% growth recorded in 2024, backed in part by a rebound in inbound tourism.

Looking ahead to 2026, UOB expected the Vietnamese dong (VND) to continue underperforming regional peers, even amid a broadly softer US dollar environment. The bank maintains a cautious stance on the currency, forecasting the US$/VND exchange rate at 26,300 in Q1-2026, 26,100 in Q2-2026, 26,000 in Q3-2026 and 25,900 in Q4-2026.

With real GDP expanding by a robust 7.85% Q1-Q3 2025, Vietnam’s outlook remains positive for 2026. However, one downside risk to watch is the implementation of the final reciprocal tariff rates since 7 August – which saw the rate for Vietnam staying at 20% - which could potentially dampen global trade activity going into 2026 as US consumers and producers are burdened with higher import costs.

UOB economists cautioned that growth momentum may ease in the final quarter of 2025 due to a high base effect in Q4 of 2024, ongoing tariff uncertainties and trade frictions. As a result, the bank expected Q4 of 2025 GDP growth to slow to around 7.2%, bringing full-year 2025 growth to 7.7%.

Achieving the government’s official growth target of 8.3–8.5% would require an exceptionally strong Q4-2025 expansion of 9.7–10.5%, which UOB viewed as challenging under current conditions.

For 2026, UOB forecasts Vietnam’s GDP growth to moderate slightly to around 7%, reflecting base effects and the fading impact of export front-loading.

Source: VOV

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