Trade momentum strengthens, domestic fundamentals consolidate

Vietnam continued to surprise the market as third-quarter GDP growth reached 8.2 percent year-on-year, the highest in ASEAN and marking the second consecutive quarter above 8 percent. While many regional economies experienced declining exports due to the end of the “front-loading” cycle, Vietnam sustained double-digit export growth, far exceeding market expectations.

According to a report from HSBC Vietnam, external trade remained a prominent bright spot. The trade surplus in Q3 doubled compared with the first half of the year, supported by expanding trade with partners beyond the United States. The rising wave of investment and technology demand related to AI is providing significant advantages to economies with strong electronic manufacturing capabilities such as Vietnam. Exports to the United States rose nearly 30 percent year-on-year, primarily driven by components and technology consumer goods.

Alongside trade, the domestic economy has demonstrated its role as a “dual pillar” for growth. Services accelerated robustly, offsetting the decline in goods. Retail sales in Q3 increased 12 percent year-on-year, with a fast recovery, only about 3 percent below the pre-pandemic trend. Tourism became a notable highlight with approximately 15 million international arrivals by the end of Q3, reaching 120 percent of 2019 levels and marking the fastest recovery in ASEAN, despite Vietnam not yet expanding large-scale visa exemptions.

Public investment continued to be a critical growth driver as major infrastructure projects accelerated construction. The construction sector greatly benefited from improved disbursement progress, although the disbursement rate has reached only about 50 percent of the annual target. This indicates considerable room to further boost growth from public investment in the coming period.

Thanks to the combination of these positive factors, HSBC significantly upgraded its growth forecast for Vietnam to 7.9 percent for 2025 (up from 6.6 percent) and 6.7 percent for 2026 (up from 5.8 percent). At the same time, inflation is projected to increase only moderately and remain within the control range. This is an important signal affirming Vietnam’s resilient growth position even as regional and global economies face persistent uncertainties.

Manufacturing rebounds, FDI remains strong, risks require attention

Industrial production is recovering strongly, with a 10 percent increase in Q3. Both exports and imports surged nearly 20 percent, reflecting strong openness and resilience in the export-oriented manufacturing sector. The trade surplus reached USD 3 billion, further strengthening confidence in the competitiveness of major export industries.

Foreign direct investment (FDI) inflows also maintained a positive trajectory. Total FDI increased 15 percent, confirming that Vietnam remains an attractive destination in global supply chains. However, newly registered FDI fell 9 percent, reflecting continued volatility in the global investment environment. The FDI structure is shifting: Singapore and Mainland China each accounted for about one-quarter of newly registered capital; flows from South Korea declined, while the United States is filling part of this gap. Despite prolonged trade tensions between the world’s two largest economies, Vietnam remains at the center of supply chain restructuring.

Macroeconomic stability continued to strengthen with inflation staying at an appropriate level. Inflation in September rose 3.4 percent year-on-year due to food and fuel price pressures during the National Day holiday. Core inflation stood at 3.2 percent, well below the 5 percent ceiling set by the State Bank of Vietnam. Credit growth reached 20 percent by the end of August, higher than the initial 16 percent target, reflecting a loosening of credit conditions to support business and consumption recovery.

The Government targets GDP growth of 8 percent in 2025 and 10 percent in 2026. These goals are challenging yet achievable if Vietnam sustains the recovery momentum of trade, advances service development, accelerates public investment disbursement, and effectively capitalizes on the global investment relocation wave.

Strong domestic fundamentals and emerging opportunities from technological innovation are creating a solid launchpad for Vietnam to continue advancing steadfastly in its development journey, reinforcing its position as a regional leader in growth dynamism.