A surge in exports ahead of the United States tariff hikes and the government’s expansionary policies fuelled economic growth in the first half (H1) of 2025. However, growth is expected to slow for the rest of the year due to the impact of the reciprocal tariffs that took effect on August 7. While the domestic economy remains resilient, growth is expected to moderate from the strong performance in the first half of 2025, ADB said in a press release.
“Better coordination between fiscal execution and monetary policies will help avoid overburdening monetary tools and preserve macro-financial stability,” said Shantanu Chakraborty, ADB country director for Vietnam. “In the long term, wide-ranging regulatory reforms must tackle structural challenges, like ensuring climate resilience, boosting private sector competitiveness, enhancing the efficiency of state-owned enterprises, tax modernisation, and digital transformation. This is vital for a more balanced growth model.”
US reciprocal tariffs on Vietnam—20 per cent on imports and 40 per cent on transhipped goods—pose significant downside risks to the near-term growth. For the remainder of the year, these tariffs are expected to weigh on trade and investment, underscoring the urgency of structural reforms to foster a more balanced growth model, supported by stronger domestic demand and more diversified export markets to cushion tariff-related shocks.
The inflation is projected to reach 3.9 per cent in 2025, easing slightly to 3.8 per cent in 2026. The decline in global energy prices has helped lower transportation costs, which account for a significant share of the consumer price basket.
ADB’s ADO September 2025 report maintained a positive outlook for Vietnam’s economy in 2025–2026 but cautioned about risks from both global and domestic fronts. A sharper-than-expected global slowdown, driven by weaker growth among key trading partners and financial volatility, could intensify headwinds. At home, despite support from public investment reforms, rising financial vulnerabilities and policy delays may limit the impact of stimulus measures, added the release.
ALCHEMPro News Desk (SG)
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