StanChart revises Vietnam's 2025 growth forecast to 6.1% from 6.7%

The bank expects growth to slow to 4.9 per cent year on year (YoY) in the second half (H2) of the year from 7.5 per cent in H1, it said in its latest macroeconomic update about the country.

Despite a softer near-term trade outlook, Vietnam’s macro fundamentals stay solid. Export growth picked up in early 2025, and the country continues to post modest trade surpluses, according to the report.

Imports have also grown, with raw materials, production equipment and spare parts accounting for a significant share.

On the external front, Vietnam recorded a strong trade surplus of $2.8 billion in June, which supported the Vietnamese currency and improved external balances. However, retail sales growth softened to 8.3 per cent YoY in the month, indicating some moderation in domestic demand, a domestic media outlet reported.

The bank also revised its 2025 inflation forecast to 3.5 per cent, from 3.8 per cent. The upward reversal in inflation has stalled in recent months, with headline inflation staying below 4 per cent YoY for the 11th consecutive month in June.

This trend may reduce the scope for further monetary easing and could prompt policymakers to maintain a more neutral stance, Standard Chartered noted.

Demand-driven inflation risks, however, remain. The continued upward momentum in prices and ongoing currency weakness may limit the space for rate cuts. Standard Chartered expects the refinancing rate to remain unchanged for the rest of this year.

Foreign direct investment (FDI) flows have seen strong improvement, led by the manufacturing sector. In H1 2025, disbursed FDI rose by 8.1 per cent YoY to $11.7 billion, while pledged FDI rose by 32.6 per cent YoY to $21.5 billion.

ALCHEMPro News Desk (DS)