Oxford Economics Forecasts Vietnam’s 2025 Economic Growth at 6.5%
Oxford Economics predicts that Vietnam’s GDP will experience growth of 6.7% in the current year and is expected to grow by 6.5% in the next year. This growth is mainly attributed to a stable manufacturing sector and a robust recovery in domestic demand.
Vietnam has emerged as a leading performer in the ASEAN region this year, with its full-year growth projected to reach 6.7%. As one of the ASEAN-6 nations, which includes Malaysia, Singapore, Indonesia, Thailand, Vietnam, and the Philippines, Vietnam is anticipated to maintain its strong performance with a projected growth rate of 6.5% in the coming year.
According to Oxford Economics, the continued economic growth in Vietnam will be largely driven by the export of processed and manufactured goods. Vietnam’s role as a key packaging and testing hub for the semiconductor industry is notable, with significant operations from companies like Intel and Amkor Technology. Despite an expected slowdown in global demand for chips next year, the semiconductor industry will continue to have a positive impact on the country’s economic progress.
The global supply chain disruptions have led to an oversupply of inventory, weakening demand in sectors such as automotive, mobile phones, and computers. Consequently, the export growth in chips across Asia has decelerated since early 2024. In Vietnam, this is evident in the reduced production of electronic components and accessories since mid-2024. However, the manufacturing sector is predicted to gain renewed momentum by 2025, particularly in fields associated with artificial intelligence and increased investment in global data centers. Although Vietnam is not yet a chip producer, its APT hub status remains beneficial.
In addition to semiconductors, other significant exports such as machinery, electrical equipment, textiles, and agricultural products are expected to continue their growth trajectory. The potential tariff hikes are prompting firms to increase exports, which helps to balance the short-term dip in electronics demand. Additionally, the US’s loose fiscal policy presents further advantages for Vietnam, given its status as a leading export destination.
Foreign direct investment (FDI) inflows into Vietnam are expected to sustain their growth, albeit at a slower rate. FDI enterprises currently contribute to 75% of the nation’s total export turnover, and this trend is projected to continue supporting exports amidst concerns over high taxes on goods manufactured in China.
Oxford Economics indicates that there may be a slowdown in FDI inflows into Vietnam by early 2025, primarily due to uncertainty over potential US tariffs on Vietnamese goods. Should these tariffs be implemented, a 10% tax could apply to products such as automobiles, metals, and solar panels. However, the tariffs are unlikely to significantly impact Vietnam in 2025 due to the delay between their announcement and actual enactment.
The domestic economic outlook remains positive, with strong wage growth driven by FDI job creation, which is expected to support private consumption. Economists anticipate that credit growth will improve in 2025, supported by adjustments in credit controls and a strengthened domestic business environment.
Nevertheless, the drag on the real estate sector is likely to persist until the end of 2025, with the process of offloading bad debt requiring additional time.
