The Bank expects growth to slow to 4.9% year-on-year in the second half of the year (H2) from 7.5% in the first half of the year (H1).

According to the report, despite a softer near-term trade outlook, Vietnam’s macro fundamentals remain solid. Export growth picked up in early 2025, and the country continues to post modest trade surpluses. Imports have also grown, with raw materials, production equipment, and spare parts accounting for a significant share.

On the external front, Vietnam recorded a strong trade surplus of US$ 2.8 billion in June, which supported the VND and improved external balances. However, retail sales growth softened to 8.3% y/y, indicating some moderation in domestic demand.

The Bank also revised its 2025 inflation forecast to 3.5%, from 3.8%. The upward reversal in inflation has stalled in recent months, with headline inflation staying below 4.0% year-on-year for the 11th consecutive month in June. This trend may reduce the scope for further monetary easing and could prompt policymakers to maintain a more neutral stance.

However, demand-driven inflation risks remain. The continued upward momentum in prices and ongoing currency weakness may limit the space for rate cuts. Standard Chartered expects the refinancing rate to remain unchanged for the rest of 2025.

FDI flows have shown strong improvement, led by the manufacturing sector, and followed by the property sector. In H1-2025, disbursed FDI rose 8.1% year-on-year to US$ 11.7 billion, while pledged FDI rose 32.6% y/y to US$ 21.5 billion.

The Bank recently raised its US$-VND forecast to 26,300 for both end-Q3 and end-2025 (from 26,000 and 25,700, respectively, previously).

Tim Leelahaphan, Senior Economist for Vietnam and Thailand, Standard Chartered Bank, said “Vietnam’s trade outlook remains encouraging, supported by solid export performance and strong tourism recovery. While we expect some moderation in both external and domestic indicators in the near term, this also presents an opportunity for the central bank to rebuild foreign exchange reserves. Overall, we believe Vietnam is well-positioned to navigate near-term challenges and sustain its growth momentum.”

As part of its ongoing efforts to provide market insights, Standard Chartered recently hosted the virtual Global & Vietnam Outlook H2 2025, bringing together clients, businesses, and industry leaders to discuss key economic trends shaping global and Vietnam’s markets.

Standard Chartered projects strong Q1 growth despite trade headwinds

VOV.VN - Standard Chartered Bank predicts Vietnamese GDP will grow by 7.7% in the first quarter of the year, up from 7.6% in the fourth quarter of last year, according to its latest macroeconomic update on Vietnam.