Vietnam's exports to US now expected to grow 5% in 2025: UOB

Vietnam’s real GDP expanded by 7.96 per cent year-over-year (YoY) in Q2 2025, outpacing Bloomberg’s forecast of 6.85 per cent and UOB’s own projection of 6.1 per cent, according to a report by UOB’s Global Economics & Market Research Unit.

This also marks a substantial rise from the revised 7.05 per cent growth recorded in the first quarter.

Vietnam posted a 7.52 per cent GDP growth in the first half (H1) of the year, the highest H1 performance since 2011. The growth was primarily fuelled by businesses fast-tracking export orders during a temporary 90-day reduction in US tariffs, during which goods faced only a basic 10 per cent duty.

Vietnam’s export turnover surged 14.4 per cent YoY to reach $219 billion in H1, while imports grew 17.9 per cent to $212 billion. These mid-year figures nearly match Vietnam’s full-year trade performance in 2024.

However, challenges persist in the manufacturing sector. Vietnam’s Purchasing Managers’ Index (PMI) remained below the 50-point benchmark in six of the past seven months, indicating contraction and signalling ongoing pressure, particularly from falling new export orders, the report added.

Export orders in June saw their steepest decline since September 2021, echoing a similar downturn in May 2023, according to S&P Global. Nevertheless, UOB remains cautiously optimistic, noting signs of stabilisation. Positive progress in trade negotiations with the US has prompted the bank to revise its forecast for Vietnamese exports to the US—from an expected 20 per cent decline to a modest 5 per cent growth, said Vietnamese media quoting the UOB report.

For non-US markets, exports are expected to rise by 10 per cent, close to the 11.3 per cent growth recorded last year. Overall, Vietnam’s total exports are projected to grow by 8.5 per cent in 2025, a slowdown from 2024’s 14 per cent.

Factoring in these trade dynamics along with trends in manufacturing and foreign direct investment (FDI), UOB now expects Vietnam’s GDP growth in 2025 to reach 6.9 per cent—0.9 percentage points higher than its original forecast.

On the monetary policy front, UOB noted that the economy’s strong performance could reduce the need for further rate cuts. The State Bank of Vietnam is now expected to keep its policy rates steady, with the refinancing rate maintained at 4.5 per cent.

ALCHEMPro News Desk (SG)