Citi remains upbeat about Vietnam's economic outlook

Citi remains upbeat about Vietnam's economic outlook

Citi remains optimistic about Vietnam's economic prospects, projecting 7 per cent GDP growth in 2025 amid strong exports, recovering domestic consumption, and resilient investment trends.

Citi held a seminar on August 13 in Ho Chi Minh City, where researchers said Vietnam's overall export growth in the first half of the year (H1) increased 15 per cent, propelled by a surge in shipments to the United States.

The country's domestic consumption has also continued to recover.

Minh Ngo, Citi Vietnam's head of markets and country treasurer

Retail sales growth has recovered, although still slightly lower in comparison with pre-COVID levels. Vehicle sales rose by more than 10 per cent in H1, while visitor arrivals exceeded pre-COVID levels by 20 per cent.

Citi Economistsunderlined the resilient investment growth despite the uncertainty of tariffs. Vietnam is among a few economies with a rising growth trend in capital formation across the region, with gross foreign direct investment (FDI) stable this year.

The medium term manufacturing outlook is still robust and industrial production is also supported by domestically oriented industries. Electronics export growth in recent months has been far outpacing industrial production growth.

“Despite macro uncertainty, Vietnam continues to deepen supply chains. In relative terms, Vietnam is likely to retain some tariff advantage versus other economies in Asia,” said Helmi Arman, Citi's chief economist for Vietnam and Indonesia.

“FDI may increasingly target Vietnam's domestic market as Vietnam's GDP per capita has now exceeded $4,000,” he noted.

Citi Economists assume that the VND depreciation is still expected but the pace should ease in H2 onwards. As exports to the US comprised around 30 per cent of total exports in the first half of 2025, Vietnam is still vulnerable to US trade policy.

“Citi's leadership extends beyond market solutions into comprehensive economic and financial research. Our seminar provides clients with in-depth insights into critical factors shaping Vietnam's economy.

“We strongly believe that the country's strong economic story over the past three decades is continuing despite potential global uncertainties,” said Minh Ngo, Citi Vietnam's head of markets and country treasurer.

VIR