In a report released on July 8, UOB’s Global Economics and Market Research Unit said Vietnam’s real GDP expanded by 7.96 per cent year-on-year in the second quarter of 2025, far exceeding Bloomberg’s forecast of 6.85 per cent and UOB’s earlier estimate of 6.1 per cent. It also surpassed the revised 7.05 per cent growth recorded in the first quarter.
For the first half of 2025, Vietnam’s GDP rose by 7.52 per cent year-on-year, marking the strongest first-half growth since records began in 2011. The surge was largely attributed to companies rushing to fulfil export orders during a 90-day window in which the United States temporarily eased reciprocal tariffs, applying a flat 10 per cent rate instead.
In the same period, export turnover climbed 14.4 per cent to USD 219 billion, while imports increased 17.9 per cent to USD 212 billion, nearly matching the full-year growth rate in 2024.
Computers and electronic products led Vietnam’s exports in the first half of the year, rising 42 per cent to USD 47.7 billion. They were followed by mobile phones, which declined 1.1 per cent to USD 26.9 billion, and machinery and equipment, which rose 16.3 per cent to USD 27 billion. Together, these three categories made up about 46 per cent of the country’s total exports, highlighting its reliance on the electronics sector.
Despite the export boost, the manufacturing sector remains under pressure. Vietnam’s Purchasing Managers’ Index fell below the 50-point threshold in six of the past seven months, reflecting subdued new orders. According to S&P Global, export orders in June declined at the sharpest pace since September 2021, matching the drop seen in May 2023.
Outlook improves but tariffs remain a risk
UOB analysts said that recent positive developments in trade talks with the US signal that the worst may be over for Vietnam, though tariffs continue to pose a key risk. In light of newly adjusted US tariffs of 20 per cent on Vietnamese goods, UOB now forecasts a 5 per cent increase in exports to the US, a sharp revision from the previously projected 20 per cent decline.
For non-US markets, exports are expected to grow by 10 per cent, close to the 11.3 per cent increase in 2024. Overall, Vietnam’s total exports are projected to grow 8.5 per cent in 2025, slowing from the 14 per cent increase last year.
Factoring in these trade dynamics, along with the impact on manufacturing and foreign direct investment, UOB raised its GDP forecast for 2025 by 0.9 percentage points to 6.9 per cent.
On monetary policy, UOB said strong growth may reduce the need for further easing. It expects the State Bank of Vietnam to keep its key policy rates unchanged, with the refinancing rate remaining at 4.5 per cent.
“If domestic business and labour market conditions deteriorate sharply in the next one to two quarters, we see the possibility of the SBV lowering the refinancing rate in a single step to the COVID-19 low of 4.0 per cent, followed by another 50 basis point cut to 3.5 per cent, provided that the foreign exchange market is stable and the US Federal Reserve proceeds with rate cuts,” the report said. “For now, our base case remains no change to the SBV policy.”
