Standard Chartered puts Vietnam's 2025 growth forecast at 6.1%, country aims for 'at least 8%'

Standard Chartered has revised its 2025 GDP growth projection for Vietnam to 6.1%, down from 6.7% early this year.

The country's economic expansion might slow to 4.9% year-on-year in H2, from 7.5% in H1, the bank said in a release on Thursday.

The Asian Development Bank (ADB) on Wednesday also revised down its Vietnam GDP growth projection to 6.3% in 2025 and 6% in 2026, respectively.

The forecasts by Standard Chartered and ADB are much lower than the target of "at least 8%" set by the National Assembly, the country's legislature.

Exports, FDI, stimulation of domestic consumption, and heightened public investment are expected to be major driving forces of the country's economic enlargement in 2025.

Vietnam's GDP growth in H1 was 7.52%, a record high in 15 years, and it was 7.96% for Q2 this year, according to government data.

In its latest update, Standard Chartered stated that despite a softer near-term trade outlook, Vietnam’s macro fundamentals remain solid.

Export growth picked up in early 2025, and the country continues to post modest trade surpluses. 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 VND and improved external balances. However, retail sales growth softened to 8.3% year-on-year, indicating some moderation in domestic demand.

The bank also revised its 2025 inflation forecast to 3.5%, from 3.8%. The upward reversal in inflation has stalled in recent months, with headline inflation staying below 4% year-on-year 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," the bank noted.

However, demand-driven inflation risks 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 2025.

FDI flows have shown strong improvement, led by the manufacturing sector, and followed by the property sector. In H1/2025, disbursed FDI rose 8.1% year-on-year to $11.7 billion, while pledged FDI rose 32.6% to $21.5 billion.

Standard Chartered recently raised its USD-VND forecast to 26,300 for both end-Q3 and end-2025 (from 26,000 and 25,700, respectively, previously).

Meanwhile, Singaporean bank UOB's USD/VND projections updated on July 8 were 26,400 in Q3/2025, 26,200 in Q4/2025, 26,000 in Q1/2026, and 25,800 in Q2/2026.

Tim Leelahaphan, senior economist for Vietnam and Thailand, Standard Chartered Bank, commented: "Vietnam’s trade outlook remains encouraging, supported by solid export performance and strong tourism recovery.

"While we expect some moderation in both external and domestic indicators in the near term, this also presents an opportunity for the central bank to rebuild foreign exchange reserves. Overall, we believe Vietnam is well-positioned to navigate near-term challenges and sustain its growth momentum."

An online dialogue between the government and leaders of localities on economic growth scenarios on July 16, Prime Minister Pham Minh Chinh made it clear that Vietnam needs to achieve a GDP growth rate of about 8.3-8.5% this year, creating momentum to reach a double-digit level in the 2026-2030 period.

"At this conference, the Government announces such specific figures that we need to strive for. There will be a new resolution on assigning targets and managing growth scenarios," he noted.