Vietnam Economic Growth Report 2025

Executive Summary

Vietnam's economy continues to demonstrate robust growth momentum in 2025, with GDP expanding 7.96% in the second quarter of 2025 over the same quarter of the previous year. Vietnam's GDP hit 7.52% growth in H1 2025, the highest first-half performance since 2011, led by industry and services. The first half of 2025 recorded growth of 7.52%, marking the highest mid-year growth rate since 2011, driven by strong performance in services and manufacturing sectors, despite global trade tensions and US tariffs.

Key Economic Indicators 2025

1. GDP Growth Performance

Actual Results

Q1 2025: 6.9% year-on-year growth in the first quarter
Q2 2025: 7.96% (year-on-year)
First Half 2025: 7.52%

2025 GDP Growth Forecasts

World Bank: 5.8%
Asian Development Bank (ADB): 6.6% (down from earlier 6.3% forecast)
IMF: 5.2%
Government Target: 8.3–8.5 percent

2. Inflation Rate

2025 Inflation Trends

May 2025: 3.24%
June 2025: 3.57% (highest since beginning of year)
IMF Forecast for 2025: 2.9%
ADB Forecast for 2025: 4.0%

Inflation remains well-controlled within safe parameters and manageable target range of 3-4.5%.

3. Unemployment Rate

Q1 2025: 2.20% (down from 2.22% in Q4 2024)

Unemployment continues at historically low levels, reflecting a stable labor market.

4. Foreign Direct Investment (FDI)

First 5 months of 2025

Registered Capital: $18.4 billion (up 51% year-on-year)
Disbursed Capital: $8.9 billion

First Half 2025

Total FDI: US$21.51 billion, marking a 32.6% year-on-year increase

FDI shows strong positive momentum, reflecting foreign investor confidence in Vietnam's economic prospects.

Sectoral Analysis

Primary Growth Drivers

Services Sector: Major contributor to GDP growth
Manufacturing Sector: Maintains recovery and development trajectory
Export Industries: Continue as economic backbone
Banking Sector: Projected to experience a 17% increase in earnings in 2025, driven by a 15% growth in system-wide credit

Retail Performance

For the first quarter of 2025, retail sales reached 1.708 quadrillion VND (US$66.83 billion), reflecting a 9.9% year-on-year growth.

Challenges and Risk Factors

Global Trade Tensions: Impact on export activities
US Tariff Policies: Pressure on export-oriented businesses
Geopolitical Instability: Increased business uncertainty
FDI Overdependence: Experts warn of inflation and FDI overdependence
Macroeconomic Stability: Growth must not come at the expense of macroeconomic stability, rising public debt, or surging inflation

Historical Comparison

2024: GDP growth of 7.1%
2025 (forecast): Growth may moderate due to external factors
Long-term outlook: Resilient fundamentals despite short-term headwinds

The year-on-year GDP growth rate in the first quarter in 2020-2025 was respectively:

3.21%, 4.85%, 5.42%, 3.46%, 5.98%, 6.93%

Economic Outlook and Projections

Near-term Prospects (2025)

Vietnam's economy started 2025 strongly, with 6.9% year-on-year growth in the first quarter. However, the outlook is more challenging amid global trade tensions and high uncertainty. Vietnam's economy is expected to maintain solid growth despite global uncertainties. The government's target of 8.3-8.5% appears ambitious given international forecasts, but strong domestic fundamentals provide support.

Key Supporting Factors

Robust FDI inflows: Indicating continued investor confidence
Low unemployment: Supporting domestic consumption
Controlled inflation: Maintaining purchasing power
Export competitiveness: Despite trade challenges
Parliamentary Support: Vietnam's parliament has raised the country's GDP growth target for 2025 from 6.5% to 7% to at least 8%

Risk Mitigation Strategies

The Vietnamese government continues to implement policies to:

Diversify export markets
Strengthen domestic demand
Enhance economic resilience
Maintain macroeconomic stability
Provide room for greater support by fiscal policy to cushion the impact of global shocks if needed

Conclusion

Vietnam's economic performance in 2025 demonstrates the country's resilience and growth potential. While external challenges persist, strong fundamentals including low unemployment, controlled inflation, and robust FDI inflows position the economy well for sustained development. The gap between government targets and international forecasts suggests a cautiously optimistic but realistic approach to growth expectations is warranted.

The government is determined to hit the 8% growth target in 2025 to lay the groundwork for double-digit expansion in the years ahead, though international institutions remain more conservative in their projections. The ambitious GDP target rides on the back of an impressive influx of foreign direct investment into the country, demonstrating continued international confidence in Vietnam's economic prospects.