HÀ NỘI — Việt Nam's GDP is projected to expand 7.1 per cent year-on-year in the first quarter of this year, according to a forecast by Singaporean United Overseas Bank (UOB). 

The bank remains cautiously optimistic about Việt Nam’s economic outlook, maintaining its full-year growth forecast at 7 per cent for 2025.

Looking further ahead, UOB anticipates growth accelerating to 7.4 per cent in 2026, driven by the government’s efficiency initiatives.

According to UOB experts, Việt Nam’s real GDP in Q4/2024 grew 7.55 per cent year-on-year, extending the momentum from a revised 7.43 per cent year-on-year in Q3/2024, and far ahead of market expectations.

With the surprisingly strong performances in three straight quarters, the country's economy expanded 7.09 per cent in 2024 from 5.1 per cent in 2023, beating handily consensus call of 6.7 per cent and official target of 6.5 per cent. This was the best showing since the post-COVID rebound in 2022 (8.1 per cent).

The boom in exports in 2024 resulted in its strongest economic performance since 2022. Việt Nam's economy highly open nature (exports value was about 90 per cent of GDP in 2024, the second highest in ASEAN after Singapore’s 174 per cent and ahead of the third-placed Malaysia’s 69 per cent).

However, UOB said, this high degree of openness means that Việt Nam is vulnerable to disruptions and frictions to international trade especially with US President Trump’s focus on trade imbalances.

SBV to stay steady

According to the bank, economic growth based on staying robust in 2024 and into 2025 and the US Fed poised to hold steady, there is less urgency for the State Bank of Vietnam (SBV) to hurry into any policy easing.

At the same time, inflation ticked higher to 3.6 per cent in 2024 from 3.26 per cent in 2023, though still below the 4.5 per cent target.

However, with the prospects of further trade tensions globally under Trump and the accompanying US dollar strength an emerging concern, SBV is expected to stay alert to downside pressures on the VND. As such, the best course of action currently is for the key refinancing rate to stay at 4.5 per cent. — VNS