One of the production lines of Đà Nẵng Rubber Co. Việt Nam’s economy expanded 7.09 per cent in 2024. — VNA/VNS Photo Quốc Dũng

HÀ NỘI — Việt Nam’s GDP growth will reach 7 per cent in 2025, following the strong momentum from 2024, the Singapore-based United Overseas Bank (UOB) has forecast.

"We expect positive momentum from domestic drivers such as production, consumer spending and visitor arrivals to contribute to the activities, especially in the first half," the bank said in its latest report.

However, uncertainty will be a major risk for Việt Nam in the second half, with its rising dependence on exports, which have grown to a record high of more than US$400 billion in 2024, about the size of Việt Nam’s nominal GDP of $450 billion, according to the bank.

Việt Nam’s real GDP extended its momentum further in Q4/2024, growing 7.55 per cent year-on-year, from a revised 7.43 per cent year-on-year in Q3.

With strong performances over the past three quarters, Việt Nam’s economy expanded 7.09 per cent in 2024 from 5.1 per cent in 2023, surpassing the target of 6.5 per cent. This was the best showing since the post-COVID rebound in 2022, which was at 8.1 per cent, UOB said.

The bank also anticipates that with overall and core inflation staying below the official target of 4.5 per cent for most of 2024, particularly towards the later part of the year, this has opened up the possibility for the State Bank of Vietnam (SBV) to ease monetary policy.

However, the exchange rate market has now emerged as another concern for the SBV, which is likely to keep its policy rates steady to fend off depreciation pressures on the domestic currency.

"Given the uncertainty ahead on the US Fed policy trajectory and geopolitical/trade tensions after US President Trump takes office, we expect SBV to keep its main policy rate steady for now, with the refinancing rate held at 4.5 per cent ", the report stated. — VNS