UOB Forecasts Vietnam’s Q1 GDP Growth at 7.1%
United Overseas Bank (UOB) remains optimistic yet cautious about Vietnam’s economic outlook, forecasting GDP growth of 7.1% in the first quarter of 2025. This follows a consistent upward trend in 2024, where quarterly growth rates reached 6.93%, 7.43%, and 7.55%, contributing to an annual GDP increase of 7.09%.
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Industrial Output, Exports, and Public Investment Drive Momentum
Data from Vietnam’s General Statistics Office highlights a robust start to 2025:
- Industrial production rose at its fastest pace in 5 years
- Import-export turnover increased by 12%
- Public investment surged 21.7% year-over-year
These indicators provide strong support for the economy heading into Q1.
UOB Cautions Against Trade Risks Amid Global Uncertainty
Despite positive signs, UOB points to Vietnam’s high economic openness as a risk factor amid rising global trade tensions. The bank warns that disruptions—particularly from U.S. trade policies under former President Donald Trump—could impact Vietnam’s export-driven growth.
“The U.S. trade deficit with Vietnam has nearly quadrupled since 2016, reaching $124 billion in 2024,” the report notes.
Full-Year GDP Growth Remains at 7%, With Caution on VND
UOB maintains its 7% GDP growth forecast for the full year. However, the Vietnamese đồng (VND) is expected to weaken to 26,000/USD by Q3, while inflation pressures could prompt the State Bank of Vietnam to hold the refinancing rate at 4.5%.
Stronger Public Investment Needed to Sustain Growth
UOB agrees with Vietnam’s national growth target of at least 8% in 2025 and double digits by 2030, but stresses that exports and manufacturing alone won’t be sufficient.
Vietnam must significantly boost public sector capital investment to shield itself from global slowdowns. While the country has maintained investment at around 30% of GDP, it still lags behind China, where rates exceed 40%.
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