Singapore-based United Overseas Bank (UOB) has raised its forecast for Vietnam’s GDP growth in 2026 to 7.5% from a previous estimate of 7%, citing the country’s stronger-than-expected economic performance in 2025.
According to UOB’s latest Vietnam economic outlook report, the country’s real GDP expanded by 8.46% year-on-year in the fourth quarter of 2025, accelerating from 8.25% in the third quarter. The robust performance was largely driven by resilient export activity and steady manufacturing despite the adverse impact of US tariffs.
The fourth-quarter growth rate significantly exceeded Bloomberg’s forecast of 7.7% as well as UOB’s earlier projection of 7.2%, marking the fastest quarterly expansion since 2009, excluding the volatile period caused by the COVID-19 pandemic.
In 2025, Vietnam’s GDP grew by some 8%, beating UOB’s forecast of 7.7% but still falling short of the Government’s target of 8.3–8.5%, which would have needed an extraordinary boost in the final quarter.
Exports continued to be the main engine of growth. In the fourth quarter of 2025, export turnover rose 19% year-on-year, while full-year exports increased 17%, despite tariff-related headwinds. The processing and manufacturing sector also posted solid gains, expanding 11.3% in the fourth quarter, compared to 10% a year earlier, lifting full-year growth in the sector to 10.5%.
Suan Teck Kin, Executive Director in Global Economics and Markets Research at UOB, said Vietnam’s economy demonstrated remarkable resilience in 2025. With GDP growth reaching 8%, Vietnam enters 2026 on a strong footing, prompting the bank to upgrade its GDP growth forecast to 7.5% from 7% previously.
However, UOB also cautioned about several downside risks to the outlook, including a high base effect, the possibility of export growth moderating after a period of rapid expansion, and prolonged uncertainty surrounding US tariff policies.
Vietnam is considered a highly open economy and, therefore, vulnerable to external trade shocks. Exports of goods and services currently account for around 83% of GDP, the second-highest in ASEAN, after Singapore. The US remains Vietnam’s largest export market, accounting for about 30% of total exports in 2024, followed by China (15%) and the Republic of Korea (6%). Key export items to the US include electronics, phones and components, furniture, footwear and garments, which together made up nearly 80% of Vietnam’s exports to that market.
On the monetary policy front, the UOB expert believes that given the strong growth performance in 2025 and favourable prospects for 2026, the State Bank of Vietnam has limited room for further policy easing. Inflationary pressures persist, with average inflation in 2025 at 3.2% and core inflation at 3.3%, driven mainly by higher healthcare and education costs.
Exchange rate developments also warrant attention. In 2025, the Vietnamese dong depreciated 3.1% against the US dollar, the third-largest decline in Asia after the Indian rupee and Indonesian rupiah. Against this backdrop, UOB expects the central bank to keep the refinancing rate unchanged at 4.5% throughout 2026 to safeguard macroeconomic stability./.
