International Monetary Fund forecasts a slowdown in Vietnam's economic expansion to 6.5% in the year 2025.
Vietnam's Economy Faces Challenges Amidst Global Uncertainties
In a fast-evolving global economic environment, Vietnam’s economy has shown resilience, rebounding strongly in 2024 with a growth rate of 7.1%, and continuing to grow at 7.5% in the first half of 2025. However, recent developments have cast a shadow over the country's economic outlook.
According to the International Monetary Fund (IMF), Vietnam's inflation reached 3.6% on-year in June 2025. This figure, while still within manageable limits, is a slight increase from previous months. The IMF has also revised Vietnam's GDP growth forecast for 2025 down to 6.3%, citing new US tariffs and the unwinding of one-off 2025 government stimulus as contributing factors.
The World Bank, on the other hand, forecasts Vietnam's GDP growth to reach 6.6% in 2025, with economic growth projected to slow to 6.5% in 2025 and further decelerate in 2026. Citi remains optimistic about Vietnam’s economic prospects, projecting 7% GDP growth in 2025.
Downside risks to the Vietnamese economy include a further escalation in global trade tensions and tightening of global financial conditions. To mitigate these risks, the IMF emphasizes the need for policies to bolster the financial sector's resilience against shocks and maintain economic resilience and financial stability.
Strengthening the medium-term fiscal framework is crucial for reaping the growth dividends from planned large public investment while safeguarding debt sustainability. Fiscal policy could be more prominent in prudently supporting economic activity, especially with temporary and targeted support if needed.
The Vietnamese government is taking steps to manage infrastructure projects at a local level. For instance, the Steering Committee for Important Public Investment Projects in Ho-Chi-Minh-City, led by Mr. Nguyen Van Duoc, is one such regional body responsible for coordination and management.
The IMF's executive directors have called for actions to raise productivity, including improving the business environment and reforming capital and labour markets. They also stress the need for further progress on improving economic governance and tackling data gaps, including in the external sector.
Moreover, efforts should be made to boost domestic demand and reduce external imbalances. This can be achieved by investing in upgrading key infrastructure, strengthening social safety nets, and promoting greater trade diversification. Priority is given to building liquidity and capital buffers, improving the macroprudential toolkit, and upgrading the insolvency, crisis preparedness and resolution, AML/CFT frameworks, and the framework for the regulation of crypto assets.
The IMF concluded its 2025 Article IV Consultation with Vietnam on September 15. The consultation serves as a platform for the IMF to assess Vietnam's economic and financial developments and discuss policy options with the Vietnamese authorities.
In conclusion, while Vietnam's economy has shown resilience, it faces challenges in the coming years due to global uncertainties. However, with prudent fiscal policies, structural reforms, and a focus on boosting domestic demand, Vietnam is well-positioned to navigate these challenges and maintain its growth trajectory.
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