Vietnam’s Economic Growth in H1 2025: A Deep Dive

Vietnam’s economy demonstrated remarkable resilience in the first half of 2025, registering a robust growth rate of 7.52%. This impressive figure not only marks the strongest first-half performance in 15 years but also builds on an equally commendable growth of 7.09% in 2024. Despite facing a backdrop of global trade uncertainties and US tariffs, the Southeast Asian nation has emerged as a beacon of economic vitality.

A 15-Year First-Half High: Vietnam’s GDP Surges

The 7.52% growth was propelled by key sectors, showcasing overall economic health despite global challenges. The highlights include:

• Agriculture, Forestry, and Fisheries: Growing by 3.84%, supported by strong domestic stability and export demand.
• Industrial Production and Construction: This sector boasted an 8.33% growth rate, highlighting a solid foundation for infrastructure development.
• Services: With an 8.14% increase, the service sector reflects an uptick in consumer confidence, marking the highest growth in this area since 2020.

The current GDP structure reveals that services contribute 43.4% of the total, followed by industrial production and construction at 36.9%, and agriculture at 11.2%.

Inflation Trends: Contained Yet Rising

While growth figures paint a positive picture, inflation has seen a slight uptick. According to the General Statistics Office (GSO), the Consumer Price Index (CPI) increased by 3.22% year-on-year in the first quarter of 2025. The GSO attributes this rise to global commodity fluctuations and ongoing geopolitical tensions that impact supply chains.

Key contributors to the CPI rise include:

• Food Services: Up 3.78%, heavily influenced by a surge in pork prices due to supply shortages.
• Housing and Utilities: Costs rose 5.11%, driven by increases in construction material prices and an adjustment to power rates.
• Healthcare: This category saw the steepest increase at 14.4%, particularly in pharmaceuticals and medical services.

Conversely, transport costs dipped by 2.4%, attributed to a decrease in fuel prices.

Trade Performance: Navigating External Pressures

The first half of 2025 also marked a significant rebound in trade. Vietnam’s import-export turnover rose to US$432 billion, a 16.1% increase year-on-year. Exports rose by 14.4%, while imports surged by 17.9%, leading to a trade surplus of US$7.63 billion.

Top Exports

Computers, electronics, and parts dominated the export category with revenues of US$38.41 billion. Notable exports also included telephones (US$22.4 billion) and textiles (US$15.05 billion).

Key Imports

On the import side, electronics remained predominant at US$56.19 billion, closely followed by machinery and textile fabrics.

Foreign Direct Investment (FDI): Investor Trust on the Rise

FDI activity in Vietnam reached US$21.51 billion in the first half of 2025, illustrating a 32.6% increase compared to the previous year. This surge is primarily driven by substantial capital injections into existing projects and increased interest in mergers and acquisitions.

Though new capital registration declined slightly, there was a substantial influx of additional capital for ongoing projects, which more than doubled. Disbursed FDI also reached an impressive US$11.72 billion, reflecting Vietnam’s attractiveness as a manufacturing destination.

Investors have initiated landmark projects, including:

• Syre’s Circular Textiles Hub: Investment of US$1 billion.
• Trump Organization: US$1.5 billion investment in Hung Yen.

These projects symbolize growing confidence in Vietnam as a stable economic environment.

Navigating Global Economic Headwinds

Despite the positive indicators, Vietnam faces complexities owing to rising global trade tensions. A recent trade agreement with the United States introduces preferential market access, but also imposes new tariffs, including 20% on many goods and 40% on transshipped items, posing additional challenges for local exporters.

Additionally, a decline in global demand due to high interest rates and geopolitical tensions has influenced Vietnam’s manufacturing index, reflecting potential softness in industrial output.

Business Formation Trends

Vietnam logged approximately 91,200 newly established businesses in the first half of 2025, with a total capital of VND 820.9 trillion (around US$31.4 billion). This represents an 11.8% year-on-year growth in new business registrations. However, closures are becoming more frequent, with over 80,800 firms suspending operations, indicating challenges in sustaining new ventures.

In response, the government is focusing on strategic pillars such as institutional reforms, infrastructure projects, and workforce development to enhance economic resilience.

Outlook Ahead

The economic landscape in Vietnam continues to evolve, marked by a mix of external shocks and internal shifts. With sustained growth and efforts to improve business conditions, Vietnam stands poised to navigate the complexities of its geopolitical environment while focusing on domestic consumption and public investment to invigorate economic activity.