Despite global uncertainties and challenges from international trade, with GDP growth reaching 7.52% in the first 6 months of the year - the highest in nearly two decades, Vietnam is on track to become a bright spot in the Southeast Asian region. The latest forecast from MBS Securities shows that GDP growth for the whole year of 2025 could reach 7.9 - 8.1%, exceeding the original target.
Industry and construction lead the recovery
According to MBS's analysis report, the gross domestic product (GDP) in the second quarter of 2025 is estimated to increase by 7.96% over the same period - just lower than the 8.6% increase in the second quarter of 2022 in the period 2020 - 2025. This growth result has exceeded the target set for the second quarter of 2025 of 7% of the full-year growth scenario of 6.5 - 7%. However, it is still lower than the target of the 2025 growth scenario of 8% (in which, the growth target for the second quarter of 2025 is 8.2%).
Manufacturing – especially manufacturing – continues to be the main driver of GDP growth. In the second quarter of 2025, the industry and construction sector grew by 9% year-on-year, contributing 43.6% to the overall growth. Of which, the manufacturing sector grew strongly by 10.8%, with many sectors recording double-digit growth.
Key industries such as automobile manufacturing (+34.9%), non-metallic mineral products (+23.9%), metals (+18%), and electronic and computer equipment (+9.3%) all recorded positive recoveries. Overall, industrial production increased by 9.2% in the first 6 months of the year - the highest level in the 2020-2025 period.
However, in contrast to the increase in the industrial production index (IIP), the PMI – a measure of business confidence – continued to stay below the 50-point threshold in June, reaching only 48.9 points. This shows that businesses are still cautious about the order outlook, especially when the number of new export orders decreased for the eighth consecutive month – the fastest decline in the past two years. Although output is still maintained, if demand does not improve, businesses may face pressure to slow down in the coming time.
Exports boom but face challenges from tariffs
Import-export activities continue to play a key role in the Vietnamese economy with double-digit growth in the first half of 2025. Export turnover in June reached 39.5 billion USD, up sharply by 16.3% over the same period, although down slightly by 0.3% compared to the previous month. The main driving force came from items with breakthrough growth rates such as: toys and sports equipment (+145.6%), textile fibers and yarns (+73.4%), and electronics - computers - components (+40.9%).
The US market continues to be a major support for Vietnam's exports, reaching 13.7 billion USD in June - accounting for 35% of total turnover, up 33% yoy. This strong increase comes from a wave of imports from US businesses during the 90-day tax deferral period. Thanks to that, the Vietnam - US trade surplus in June reached 12.1 billion USD - up 33.4%.
In the first 6 months of 2025, total export turnover reached 219.83 billion USD (+14.4%), with leading product groups including: toys & sports (+103.4%), electronics - computers - components (+40%), and iron and steel products (+31.6%). In contrast, some key products recorded sharp decreases such as: iron and steel (-22.5%), raw plastic materials (-14%) and cameras - recording equipment (-12.8%).
In terms of markets, the US remains Vietnam's largest export market with an estimated turnover of 70.9 billion USD (+28.2%). The EU and China reached 27.3 billion USD (+10%) and 29.1 billion USD (+4.2%), respectively.
However, experts warn that this growth could slow down significantly in the second half of the year, when the Vietnam-US tariff agreement takes effect from August. Accordingly, goods exported directly from Vietnam will be taxed at 20%, while transit goods will be taxed at up to 40%. This is a lower tax rate than that of competitors in the region, but still enough to change the import strategy of many foreign businesses.
In fact, export orders have been falling for eight straight months (according to the S&P June PMI), suggesting that tariff barriers are starting to weigh on business confidence and production plans. In addition, uncertainties around the definition of “transit goods” and rules of origin will take time to clear up, causing importers to temporarily delay new orders.
Therefore, MBS forecasts that export growth for the whole year of 2025 will only be about 9% - 10%, lower than the growth rate of 14.4% in the first 6 months of the year.
FDI and public investment strongly boost the economy
In the impressive growth picture of the first half of 2025, investment capital flows continue to play an important role as a "launching pad", both from the foreign sector and the domestic budget.
Statistics show that in June 2025, newly registered foreign direct investment (FDI) capital increased sharply by 41.9% over the same period, while disbursed FDI capital increased by 8.9%. In the first 6 months of the year, realized FDI capital reached 11.7 billion USD - the highest in the past 5 years, reflecting the long-term confidence of international investors in the business environment in Vietnam. Although the total newly registered capital only reached 9.3 billion USD (down 9.6% yoy), the total registered foreign investment capital (including newly granted, adjusted and contributed capital to buy shares) reached 21.52 billion USD - a sharp increase of 32.6% over the same period last year.
Notably, the processing and manufacturing industry continued to be the “golden destination” for FDI capital flows, attracting up to 9.56 billion USD, equivalent to 81.6% of total investment capital. This is a positive signal showing that Vietnam still maintains its position as a production center in the regional supply chain. In addition, real estate attracted 932.2 million USD (accounting for 8%) and the energy sector - electricity, gas, water and air conditioning distribution - reached 444.7 million USD (accounting for 3.8%).
Along with FDI, public investment has also accelerated strongly, creating an important driving force for economic growth. In June, investment capital implemented from the State budget was estimated at VND66,600 billion (+23.8% y/y). In the first 6 months of the year, this figure reached VND291,100 billion, completing 31.7% of the yearly plan and increasing by 19.8% over the same period. Accelerating the disbursement of public investment capital in the context of exports possibly slowing down due to the impact of tariffs is considered a strategic step, both promoting short-term growth and supporting medium- and long-term infrastructure development.
The synergy between high-quality FDI flows focused on manufacturing and technology, along with increased public investment resources, is helping Vietnam build a stronger foundation for sustainable growth and resilience to external risks.
Inflation under control, impact from food and electricity prices
In June 2025, the consumer price index (CPI) increased by 0.48% compared to the previous month and 3.57% compared to the same period last year - the highest level in 5 months. Inflationary pressure mainly came from three groups: housing and construction materials (+7.2% y/y) due to increased electricity and input material prices; food (+3.2%) due to sharp increases in pork prices due to lack of supply; and healthcare (+13.6%) due to adjustments in service prices.
Although the CPI in June increased rapidly, the average inflation in the first 6 months of the year was still controlled at 3.3% - lower than the same period in 2024 (4.1%), thanks to the sharp decrease in gasoline prices (-12.6% y/y). Core inflation in the same period also increased by only 3.1%.
In its forecast, MBS said that the average CPI in 2025 will increase by about 3.5% – lower than the Government’s inflation control target of 4.5%–5%. This positive outlook is based on expectations that world oil prices will remain at $70/barrel (lower than in 2024), abundant rice supply after India lifted its export ban, and a tuition-free policy from kindergarten to high school starting in the 2025–2026 school year.
However, pressures remain as pork prices continue to rise sharply, electricity prices may be adjusted further due to the shift to renewable energy, and steel prices are expected to rise by about 3% due to strong construction demand and anti-dumping measures. Geopolitical risks could also disrupt supply chains and push up commodity prices, causing imported inflation.
Overall, although the price level tends to increase slightly again, inflation for the whole year is still assessed to be under control if supporting factors continue to be maintained.
The USD weakens globally but does not "cool down" domestic exchange rates
In June 2025, the USD/VND exchange rate continued to hit a new peak, despite the USD weakening sharply in the international market. The DXY index fell 12% in the first half of the year – the worst decline since 1973 – due to expectations that the Fed would start cutting interest rates in the third quarter. However, in Vietnam, the interbank exchange rate still increased by 2.6% compared to the beginning of the year, to 26,118 VND/USD; in the free market, the USD price exceeded 26,400 VND.
Exchange rate pressure mainly comes from internal factors. The demand for foreign currency has increased sharply due to increased imports, while exports have slowed down, causing the trade surplus to narrow. The State Treasury continues to buy USD on a large scale, draining liquidity from the market. In addition, the widening VND-USD interest rate gap, stagnant FDI inflows, and the difference in domestic and international gold prices have also contributed to exchange rate tensions.
Although the USD is forecast to continue to weaken in the second half of 2025, especially when the Fed enters a rate cut cycle (possibly to 4%), internal factors of the Vietnamese economy - from interest rate differentials, increased foreign currency demand, trade deficit, to pending capital flows - are all contributing to the increase in the exchange rate. The average exchange rate for the whole year of 2025 is forecast to fluctuate in the range of 26,600 - 26,750 VND/USD, equivalent to an increase of about 4.5% - 5% compared to the beginning of the year.
The surge in the VND/USD exchange rate, if prolonged, could affect import costs, production input prices and domestic inflation. However, if well controlled through management tools such as issuing treasury bills, open market intervention (OMO) and close coordination between the State Bank and the Ministry of Finance, the exchange rate could remain within the range of macroeconomic stability. In the context of many uncertainties in the world economy, stabilizing the exchange rate continues to be one of the biggest priorities to strengthen confidence in Vietnam's economic foundation in the second half of the year.
With a stable macro-economic foundation, a clear recovery in production, exports and consumption still maintaining growth momentum, and strong monetary and fiscal support policies, MBS believes that Vietnam is facing a great opportunity to achieve GDP growth of 7.9% - 8.1% in 2025. Although exports may slow down and the exchange rate still faces many challenges, compensating factors such as public investment disbursement, FDI attraction in the manufacturing and processing industry, low interest rates, along with the recovery of domestic consumption, will continue to be key drivers for Vietnam's economy to maintain growth in the second half of the year.
Source: https://baolamdong.vn/mbs-ky-vong-gdp-nam-2025-se-tang-7-9-8-1-nho-day-manh-von-dau-tu-cong-va-dau-tu-tu-nhan-384054.html
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