UOB raises Vietnamese 2025 GDP growth forecast to 7%
VOV.VN - The Singapore-based United Overseas Bank (UOB) has revised its GDP growth forecast for Vietnam in 2025 to 7%, up from the previous projection of 6%, citing strong momentum from 2024 and factoring in potential risks from future trade conflicts under the US administration.
According to details set out in the report, Vietnamese real GDP extended its momentum further in the fourth quarter of 2024, to record an annual surge of 7.55% from a revised figure of 7.43% on-year in the third quarter of 2024.
This is well above median consensus view of 6.7% and the bank's forecast of 5.2%. With the surprisingly strong performances over the past three quarters, the Vietnamese economy expanded by 7.09% in 2024 from 5.1% in 2023, ahead of the consensus call of 6.7% and the official target of 6.5%. This represents the best showing since the post-COVID rebound of 8.1% in 2022.
Experts analysed that both the manufacturing and services sectors continue to be the main drivers of growth, adding that growing external trade represents the main factor behind the nation’s robust performance.
Accordingly, exports have expanded over the past 10 months, rising by 12.8% on-year in December to reach a full year gain of 14%, reversing the 4.6% contraction in 2023. Imports rose by 16.1% in 2024 with the second largest trade surplus standing at about US$23.9 billion following the record high of US$28.4 billion seen back in 2023.
This represents the ninth consecutive year that the country has registered an annual trade surplus, which will be helpful in anchoring the VND exchange rate.
Furthermore, the upswing recorded in semiconductor sales since mid-2023 suggests that momentum is likely to continue further in the first and second quarters ahead.
The report outlined that the National Assembly has set a growth target of 6.5% to 7.0% for 2025, while Prime Minister Pham Minh Chinh recently called for hitting at least an 8% expansion rate through the help of faster public disbursement to boost infrastructure and attract more investments.
Based on the disciplined approach to its fiscal stance and the way public expenditure has been disbursed so far, the 8% goal seems overly ambitious, but there are still merits of it being reached
In view of the strong momentum carried over from last year, while also taking into account risks and potential downside from further trade frictions from the new US administration, experts are raising their forecast for Vietnamese GDP growth in the year ahead to 7.0% from the previous projection of 6.6%.
Economists anticipate positive momentum from domestic drivers such as production, consumer spending, and visitor arrivals to contribute to the activities, especially in the first half of the year.
However, uncertainty on trade outlook could represent a major risk for the nation in the second half of the year, specifically due its rising dependency on exports, which grew to record a high of more than US$400 billion in 2024, similar to the size of Vietnam’s nominal GDP of US$450 billion.