ADB: Vietnam's Economy Remains Resilient Amidst Global Uncertainty
	Positive Outlook for Vietnam’s Economy in 2025

Suan Teck Kin, Head of Global Market and Economic Research at United Overseas Bank (UOB).

Vietnam has adjusted its GDP growth target for this year to over 8%, as outlined in the National Assembly's resolution, aiming to build momentum for double-digit economic growth (exceeding 10%) in the years to come.

On February 25, Suan Teck Kin, Head of Global Market and Economic Research at United Overseas Bank (UOB), expressed optimism about Vietnam's ability to achieve this ambitious goal. Drawing comparisons to the growth trajectories of Singapore and China, he highlighted Vietnam's strong performance in 2024, with GDP growth surpassing 7%, as a solid foundation.

To reach these targets, Suan Teck Kin recommended increasing public investment to sustain growth and mitigate risks stemming from potential declines in exports and production. He emphasized the need to address Vietnam’s infrastructure deficit by accelerating infrastructure projects. Such initiatives, he noted, could generate short-term economic momentum during their implementation and enhance long-term productivity once completed.

In addition to traditional infrastructure, he advocated for significant investment in infrastructure related to artificial intelligence (AI), data, energy, and water resources to ensure sustainable growth. He also pointed out the cautious stance of Vietnam’s fiscal policy, with the Government aiming to reduce the public debt-to-GDP ratio from 35% to 31% by 2029. To boost public investment, he suggested considering increased borrowing and greater use of financial leverage.

The UOB expert also highlighted challenges to achieving the growth target. Vietnam's economy remains heavily dependent on trade, with exports accounting for approximately 90% of GDP—the second highest in ASEAN after Singapore (174%) and significantly higher than Malaysia (69%). While exports rose by 14% in 2024 after a previous decline, trade risks loom, particularly as the United States—Vietnam's largest export market, responsible for 30% of total turnover—implements tariff policies. These measures could impact Vietnam's manufacturing and service sectors, potentially reducing domestic spending and indirectly slowing growth if U.S. economic activity declines.

Additionally, while Vietnam achieved record FDI inflows of 25.4 billion USD in 2024, the semiconductor cycle is beginning to show signs of slowing down after a period of rapid growth, affecting key exports. The Purchasing Managers’ Index (PMI) has also declined for two consecutive months, signaling a slowdown in new orders. Tariff concerns may prompt businesses to redirect investments to countries less exposed to U.S. trade policies, further complicating Vietnam’s economic landscape.

Taking these factors into account, UOB maintains a 2025 GDP growth forecast for Vietnam at 7%, acknowledging both the potential and challenges the nation faces in reaching its ambitious economic goals.

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