Economic projection by ADB Lowers Vietnam's Growth Estimate for 2025 to 6.3%
The Association of Southeast Asian Nations (ASEAN) economies, including Vietnam, are bracing for a slower pace of growth in the next two years, according to recent forecasts. The Asian Development Bank (ADB) has revised down the projected growth rates for Southeast Asia, with an expected economic growth of 4.2% in 2025 and 4.3% in 2026, down from earlier projections of 4.7% for both years[1][2][4].
The slower pace reflects the impact of rising tariffs, global trade tensions, and weaker external demand that are dampening business and consumer sentiment and could disrupt investment. Southeast Asia’s reliance on export-driven growth makes countries like Vietnam vulnerable to tariff pressures and trade uncertainties, which weigh on export momentum and may challenge ongoing domestic investment and consumption[1][4].
Among the key challenges facing Vietnam are heightened global trade uncertainty, US tariff hikes, weaker external conditions leading to subdued business confidence, slower global economic growth, especially in major trade partners such as China and the US, and potential inflation moderation due to easing commodity prices[1][2][4].
However, there are signs of resilience in Vietnam's economy. Investment pledges rose by 32.6 per cent, while disbursement increased by 8.1 per cent on-year, indicating strong international confidence in Vietnam's economic prospects. Strong export and import growth, as well as a surge in foreign investment disbursement, drove performance in the first half of 2025. Public disbursement reached the highest level since 2018 at 24.3 per cent of the annual plan[5].
Despite the US tariffs on Vietnam increasing post a recently agreed trade deal, Citi has raised its forecast for Vietnam's 2025 GDP growth[6]. The trade deal with the US, announced in early July 2025, imposed staggered higher US tariffs on exports from Vietnam, which is expected to dampen export demand for the rest of 2025 and into 2026[7].
Inflation across Southeast Asia, including Vietnam, is lower than earlier forecasts for 2025 and 2026, thanks to lower energy and food prices, subdued consumer demand, and stronger regional currencies[3].
Nguyen Thuy Hanh, CEO of Standard Chartered Vietnam, shared her outlook on Vietnam's economy with VIR's Hong Dung. She highlighted the impact of the ongoing trade tensions and the importance of maintaining a stable macroeconomic environment to attract foreign investment[8].
In conclusion, despite the challenges posed by trade uncertainties and tariff pressures, Southeast Asian economies, including Vietnam, are expected to maintain moderate growth prospects of around 4.2-4.3% in 2025-2026, albeit at a slower pace than earlier projections. The resilience of Vietnam's economy, as indicated by strong investment pledges and disbursement, may help it navigate these challenges[1][2][4][5][6][7][8].
References: [1] ADB. (2025). Asian Development Outlook 2025. Manila: Asian Development Bank. [2] ADB. (2025). Southeast Asia's Growth Prospects Revised Downward. Press Release. [3] ADB. (2025). Inflation Across Southeast Asia Lower Than Earlier Forecasts. Press Release. [4] ADB. (2025). Southeast Asia Faces Moderate Growth Prospects Amid Trade Uncertainties. Press Release. [5] VIR. (2025). Strong Investment and Public Disbursement Drive Vietnam's Economic Performance in H1 2025. News Article. [6] Citi. (2025). Citi Raises Forecast for Vietnam's 2025 GDP Growth. Research Report. [7] VIR. (2025). US Tariffs on Vietnam's Exports Expected to Dampen Demand. News Article. [8] VIR. (2025). Standard Chartered Vietnam CEO Discusses Economic Outlook. News Article.
Businesses in Vietnam might need to adjust their financial strategies to navigate the slower growth pace predicted for the country's economy, caused by trade uncertainties and tariff pressures. The resilience of Vietnam's economy, as demonstrated by strong investment pledges and disbursement, may provide a buffer for these challenges.
