ADB trims Vietnam’s GDP forecast to 6.3 per cent for 2025

ADB trims Vietnam’s GDP forecast to 6.3 per cent for 2025

The Asian Development Bank (ADB) has revised Vietnam's GDP growth forecast for 2025 down to 6.3 per cent from the 6.6 per cent it predicted in April.

According to the bank's Asian Development Outlook (ADO) released on July 23, Vietnam’s economy is expected to remain resilient in 2025 and 2026, though growth will slow due to tariff pressures. Strong export and import growth and a surge in foreign investment disbursement drove performance in H1. Investment pledges rose 32.6 per cent while disbursement increased 8.1 per cent on-year, indicating strong international confidence in the country’s economic prospects. Public disbursement reached the highest level since 2018 at 24.3 per cent of the annual plan.

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. The Purchasing Managers' Index has signalled slowing manufacturing since late 2024. As a result, projected GDP growth has been revised down to 6.3 per cent in 2025 and 6 per cent in 2026, from 6.6 per cent and 6.5 per cent in the April forecast.

ADB has also lowered its growth forecasts for economies in Southeast Asia this year and next year due to the continuing global growth slowdown and increased trade uncertainty. Weaker external conditions have hurt business and consumer sentiments and threaten to disrupt investment in the region. The region's performance in the first quarter showed signs of slowing, particularly for those reliant on external demand, despite delays in implementing the US reciprocal tariffs and some frontloading of exports.

Except for Indonesia, the largest economy in the region, all Southeast Asian economies are expected to post weaker growth in the next two years. Thus, growth forecasts for the region have been lowered from 4.7 per cent to 4.2 per cent in 2025 and from 4.7 per cent to 4.3 per cent in 2026.

Average inflation in Southeast Asia as of July was below earlier forecasts for 2025 and 2026. Most economies saw inflation ease below central bank targets in the first five months of 2025, due to lower energy and food prices, subdued consumer demand, and stronger regional currencies. Among them, Vietnam’s inflation is expected to remain below 4 per cent through 2026.

VIR