The report noted that although Vietnam had been widely expected to face elevated tariff risks, its trade was not disrupted but instead climbed to a record US$928 billion, an 18% year-on-year increase. This was attributed to the impact of frontloading and the importance of exporting the “right” products.

Demand for AI-driven chips amid the escalation of the US-China chip race has reshaped the global semiconductor landscape, strengthening the case for electronics exports as a buffer against tariff impact. Vietnam is part of this trend, although its exports remain concentrated in low-end consumer electronics.

The country’s electronics exports now account for 35% of its total export basket, up from just 5% in 2010. Meanwhile, textiles and footwear exports have fallen from a peak of 30% in 2005 to slightly above 10% now, reflecting Vietnam’s move up the export value chain.

In addition to shipping the “right” products, Vietnam has gained market share in the United States, with exports jumping nearly 30% year on year in 2025. Despite a headline tariff of 20%, the country has continued to capture more US market share in products such as phones, textiles and footwear.

The report said Vietnam has set a strong example of how to capitalise on the “China+1” opportunity. While its trade deficit with China expanded to US$116 billion, its trade surplus with the rest of the world widened to US$136 billion, resulting in an overall trade surplus of US$20 billion.

Domestic demand has also remained resilient. Private consumption grew 8% from a high base, while investment accelerated to nearly 9% in 2025, supported by continued infrastructure spending, a traditional policy lever for Vietnam.

On the tourism front, despite missing its earlier target, Vietnam welcomed a record high of more than 21 million visitors, generating tourism receipts of US$40 billion, equivalent to 7% of GDP. Tourist arrivals have recovered to nearly 120% of 2019 levels, aided by the swift return of Chinese visitors, despite the absence of a visa-free scheme with mainland China.

Elsewhere, inflation remains in check. Headline inflation rose 0.2% month on month and 3.5% year on year in December, largely driven by a 1% increase in food prices linked to earlier flooding-related supply disruptions. The impact is expected to be temporary. Overall inflation is estimated at 3.3% for 2025, in line with HSBC expectations, supported by low oil prices and broadly stable food costs.

HSBC expects GDP growth to reach 6.7% in 2026, with inflation remaining benign at around 3.5%.

HSBC upgrades Vietnam’s 2025 growth forecast to 7.9%

VOV.VN - HSBC has raised its forecast for Vietnam’s 2025 GDP growth from 6.6% to 7.9%, citing strong third-quarter results that reinforce the country’s position as ASEAN’s fastest-growing economy, according to its latest “Vietnam at a Glance” report.