Vietnam’s economy is defying regional headwinds, with Citi Research reporting robust broad-based expansion and reaffirming confidence in the nation’s medium-term outlook.
In the third quarter of 2025, GDP rose 8.2% year-on-year, edging past both the previous quarter’s performance and Citi’s own forecast of 7.6%. Manufacturing led this surge with a 10% increase, followed closely by wholesale, retail, and construction, all reflecting healthy investment and mounting domestic demand. Final consumption, a key indicator of local resilience, matched an 8% annual rise for two successive quarters.
Exports also remained a major growth engine through September, bucking trends observed elsewhere in ASEAN. Despite global concerns and a temporary low-base effect from 2024 typhoon disruptions, Vietnam’s exports only dipped 1.6% month-on-month while US-bound electronics shipments slightly increased. Citi attributes this resilience to a structural shift in global supply chains, as manufacturers continue to relocate activities to Vietnam. Realized foreign direct investment accelerated by 8.5% year-on-year during the first nine months of 2025, and gross FDI inflows in the second quarter exceeded the prior year’s level as a percentage of GDP.
Citi’s analysts project Vietnam’s GDP to finish just under 8% in 2025—an upgrade from earlier forecasts—while the firm remains bullish about the country’s prospects to maintain similar growth rates in 2026. Key drivers include surging domestic demand, visible reforms in infrastructure and bureaucracy, and improved capital efficiency as measured by a falling incremental capital-output ratio (ICOR).
Nonetheless, some risks persist. Externally, Vietnam’s fortunes remain tied to US trade policy, with potential threats from shifting tariff definitions. Internally, while inflation is currently stable at about 3%, rapid credit expansion—especially a 36% year-on-year jump in real estate lending—warrants vigilance over financial sector risks and potential upward pressure on interest rates.
Despite these risks, Citi Research’s latest findings suggest that Vietnam is well-positioned to continue its strong growth trajectory, benefiting from deepening structural reforms and sustained investment inflows.
