UOB raises Vietnam’s 2026 GDP growth forecast to 7.5% on export, FDI strength

The lender upgraded its forecast by 0.5 percentage points from its earlier projection after reviewing Vietnam’s economic performance in 2025, which it described as one of the strongest growth years in more than a decade.

Vietnam’s real GDP expanded by 8.02 percent last year, the second-highest growth rate during the 2011–25 period, UOB said, citing data from the National Statistics Office under the Ministry of Finance.

Growth gained further momentum toward year-end, with fourth-quarter GDP rising 8.46 percent year on year, 0.21 percentage points higher than the third quarter and well above earlier projections of 7.2 percent by UOB and 7.7 percent by Bloomberg.

Exports, FDI anchor Vietnam’s 2025 growth

UOB said Vietnam’s strong economic performance in 2025 was largely underpinned by resilient exports and steady manufacturing, despite headwinds from U.S. tariff policies.

Exports remained the primary growth engine, with export turnover rising by 19 percent year on year in the final quarter of 2025 and full-year export growth reaching 17 percent compared with 2024.

Shipments to the U.S. alone surged by 28.1 percent to more than US$153 billion, even as tariff uncertainty weighed on global trade and raised concerns that higher prices could dampen U.S. import demand.

Foreign investor confidence also remained firm, with disbursed FDI increasing by nine percent to a record $27.6 billion in 2025, the highest level in five years, reinforcing Vietnam’s position as a leading destination for international capital.

The processing and manufacturing sector posted solid gains as well, expanding by 11.3 percent year on year in the fourth quarter and recording a full-year growth rate of 10.5 percent.

UOB noted that Vietnam achieved these results despite U.S. reciprocal tariffs initially announced at 46 percent in April 2025 and later cut to 20 percent, with bilateral talks still ongoing toward a lower rate.

Against this backdrop, the bank has raised its 2026 GDP growth forecast to 7.5 percent, up from an earlier projection of seven percent, with exports and FDI expected to remain key drivers.

UOB’s projection is among the most optimistic by international institutions, as the International Monetary Fund, World Bank, Asian Development Bank, and HSBC are all forecasting Vietnam’s growth next year at below seven percent.

Professor David Dapice, a retired economics professor at Tufts University in the U.S., said Vietnam had taken prudent steps and achieved results that would allow it to sustain export-led growth in 2025.

Tariff uncertainty, potential export slowdown pose risks

“With growth exceeding eight percent last year, Vietnam enters 2026 with a solid foundation,” the UOB report said.

However, the bank warned of several downside risks, including a high base effect, the possibility that export growth could moderate after a period of rapid expansion, and continued uncertainty surrounding U.S. tariff policy.

UOB noted that Vietnam’s high degree of trade openness leaves it vulnerable to external shocks, with exports of goods and services accounting for around 83 percent of GDP, the second-highest ratio in ASEAN after Singapore.

A potential downside scenario is that export orders may weaken as earlier frontloading demand fades and higher prices erode U.S. consumer purchasing power, particularly in 2026, the report added.