Vietnam’s GDP growth beats forecasts despite US tariff pressure

Vietnam’s economy has expanded by 8.5 per cent year on year in the fourth quarter of 2025, outperforming expectations and lifting full-year GDP growth to 8 per cent, according to analysis by BMI, a Fitch Solutions company. Despite falling short of the government’s 8.4 per cent target, the result exceeded BMI’s earlier 7.4 per cent forecast.

International trade was the key growth driver. Exports and imports surged 16.3 per cent and 17.1 per cent respectively in 2025, a notable rebound despite Vietnamese shipments to the US facing 20 per cent tariffs imposed under President Donald Trump. Manufacturing and construction together contributed around 3.5 percentage points to overall growth, helped by strong real estate activity and robust goods production.

Looking ahead, BMI now expects GDP growth of about 7.2 per cent in 2026, revising up its earlier 7 per cent estimate. Investment growth between 2023 and 2025 has nearly doubled, expanding productive capacity, BMI said in a release.

In parallel, general secretary To Lam has approved reforms aimed at liberalising the private sector, including preferential credit for small and medium enterprises and enhanced tax deductions for research and development.

While growth is unlikely to reach the government’s longer-term 10 per cent ambition during 2026-2031, faster reform implementation could lift near-term output. However, risks remain balanced. A sharp property market correction or a potential increase in US tariffs to 40 per cent, if Vietnam is accused of trans-shipping Chinese goods, could weigh heavily on growth.

Vietnam’s economy grew strongly in 2025, with Q4 GDP up 8.5 per cent, lifting full-year growth to 8 per cent and beating BMI forecasts despite missing the 8.4 per cent target.
Trade and investment drove growth even as US tariffs weighed.
GDP is seen growing 7.2 per cent in 2026, supported by private-sector reforms, though tariff risks persist.

Fibre2Fashion News Desk (HU)