Vietnam's economy: Why is its growth in 2025 considered the brightest in the region?

With a GDP growth rate of 8.23% in the third quarter of 2025, Vietnam continues to lead the six largest economies in the Association of Southeast Asian Nations, surpassing Thailand, Indonesia, Malaysia, the Philippines, and Singapore.

Loading and unloading export goods at Hai Phong International Container Port, Cat Hai town, Cat Hai district, Hai Phong city. (Photo: Vu Sinh/VNA)

Amidst global economic pressures stemming from slowing trade and policy uncertainty, Vietnam is emerging as a regional exception.

Recent international reports have noted increasing confidence in Vietnam's economic outlook for 2025, as key growth pillars continue to demonstrate strong and sustainable resilience.

With a Gross Domestic Product (GDP) growth rate of 8.23% in the third quarter of 2025, Vietnam continues to lead the six largest economies of the Association of Southeast Asian Nations (ASEAN-6), surpassing Thailand, Indonesia, Malaysia, the Philippines, and Singapore.

This also marks Vietnam's second-highest growth quarter in the 2011-2025 period, second only to the strong surge following the COVID-19 pandemic. Overall, for the first nine months, the Gross Domestic Product (GDP) increased by 7.85%, maintaining its position as one of the fastest-growing economies in the region.

What international organizations particularly appreciate is not only the growth rate but also the balance in the growth structure.

All three economic sectors expanded strongly: industry and construction increased by 8.69% (with manufacturing increasing by nearly 10%), services increased by 8.49% thanks to vibrant trade and tourism, and agriculture increased by 3.83% – a moderate increase but playing a key role in stabilizing food supply and reducing inflationary pressure.

Even amidst the complex natural disasters and storms in the third quarter of 2025, the manufacturing sector maintained a stable growth rate. The Purchasing Managers' Index (PMI) in November 2025 reached 53.8 points, lower than the previous month, but still firmly above the 50-point threshold, indicating that business conditions continued to improve and the processing and manufacturing sector maintained its continuous recovery for five consecutive months.

Processing shrimp for export. (Photo: VNA)

The latest data from the Customs Department also shows that Vietnam's trade volume continues to expand impressively.

As of November 15, 2025, import and export turnover reached over 801 billion USD, the highest level ever. The export structure has shifted strongly towards deeply processed and high-tech goods, reflecting the upgrading of its position in the global value chain.

Vietnam's export market map has also changed significantly: from over 20 markets in 1991, mainly in the Asia-Pacific region, to having established trade relations with more than 230 countries and territories by 2025.

The recovery momentum is further bolstered by other key drivers. Foreign direct investment (FDI) inflows into Vietnam in the first 10 months of 2025 are estimated at US$21.3 billion, the highest rate for a 10-month period in the last 5 years.

Domestic consumption recovered strongly, with retail sales in the first 10 months increasing by 9.3% compared to the same period last year, while the tourism industry surged with 15.4 million international visitors in the first nine months of 2025, placing it among the top-performing destinations in the world.

Based on that foundation, a number of international financial institutions have revised upwards their growth forecasts for Vietnam. At the end of October 2025, HSBC and Standard Chartered banks raised their 2025 forecasts to 7.9% and 7.5%, respectively. By November 2025, UOB bank had raised its forecast to 7.7%.

Most recently, S&P Global raised its growth forecast for Vietnam to 7.7% in 2025 and 6.7% in 2026.

The Organization for Economic Cooperation and Development (OECD), while acknowledging the challenges from weakening global demand, affirms that the Vietnamese economy maintains positive momentum, forecasting growth of 6.2% in 2026 and 5.8% in 2027.

However, international organizations also note risks that Vietnam cannot ignore. Weakening global demand in 2026 could affect exports, especially as the US considers increasing transit tariffs and tightening rules of origin. Natural disasters and supply chain disruptions could increase input costs, putting pressure on businesses.

Domestically, inflation may rise again due to strong domestic demand and the impact of the end of the value-added tax (VAT) reduction incentive at the end of 2026, before the tax adjustment in 2027. Furthermore, the disbursement of public investment, although improved, still needs to be accelerated to ensure spillover effects.

In light of these challenges, the Organization for Economic Cooperation and Development (OECD) recommends that Vietnam continue institutional reforms to increase productivity and the quality of growth.

Key recommendations include improving the monetary policy framework towards a market-oriented approach, increasing competition in the services sector, ensuring a level playing field between private and state-owned enterprises, and reducing the size of the informal workforce to improve the efficiency of resource allocation.

Processing mango products for export to the US, Europe, South Korea, and Japan at the An Giang Fruit and Vegetable Joint Stock Company's factory (Lam Dong province). (Photo: Vu Sinh/VNA)

From a regional perspective, the deep differentiation among the ASEAN-6 economies further highlights Vietnam's position. In Q3 2025, Malaysia recorded growth of 5.2% and Indonesia maintained a stable trajectory around 5% – two rare cases that have managed to sustain expansion amidst a slowdown in global trade.

Conversely, many other major economies are facing pressure to contract in growth. The Philippines' gross domestic product fell sharply to 4%, much lower than forecast, reflecting weakening household consumption and private investment. Singapore – ASEAN's fastest-growing economy – also saw a slowdown, with GDP growth falling to just 2.9%, a sharp drop from 4.5% in Q2 2025, as the manufacturing sector was significantly impacted by international tariffs and trade fluctuations.

Thailand continues to be a weak point in the region, with GDP growth in Q3 2025 projected at only 1.2%, the lowest since 2021. The decline in manufacturing and insufficient tourism growth are not enough to offset structural weaknesses, lowering the 2025-2026 outlook to just 1.2-2.2%.

In that picture, Vietnam's outstanding growth helps position its economy as one of ASEAN's emerging drivers, with its economic expansion rate many times higher than that of other countries in the region.

According to international observers, the difference in growth momentum indicates that Vietnam is entering a new phase of development, where policy flexibility, the quality of production and service infrastructure, and the openness of the economy will continue to be key factors in maintaining its position as one of the fastest-growing economies in Asia in the coming years.

(VNA/Vietnam+)

Source: https://www.vietnamplus.vn/kinh-te-viet-nam-vi-sao-tang-truong-nam-2025-duoc-danh-gia-sang-nhat-khu-vuc-post1081133.vnp