Vietnam’s first-half GDP growth surged to 7.52 percent in 2025, marking its strongest start since 2011, according to the National Statistics Office. While driven largely by manufacturing and robust domestic consumption, the expansion is heavily underpinned by private credit and faces rising external risks. Rapid credit growth and looming US tariffs on Vietnamese exports pose significant challenges to sustaining this momentum in the second half of the year.
Vietnam’s first-half GDP growth in 2025 reached 7.52 percent, the strongest first-half result since 2011, according to the National Statistics Office’s (NSO) first-half socio-economic report.
The report also noted, however, that this came during a period in which the “…world situation continued to be complicated… and difficult to predict.”
That is to say, where economic growth elsewhere in the world may have slowed, Vietnam still powered ahead full throttle, an anomaly that should give pause for thought.
Of course, one reading might be that Vietnam has continued to succeed where others have stalled through shrewd economic policy initiatives.
In fact, the NSO report credits government reform, decentralisation, and a slew of resolutions on research and development and innovation as being key to these “very positive” results.
That said, almost 8 percent growth is a significant jump, and it seems unlikely that the aforementioned reforms could power this momentum alone.
With this in mind, this article looks at the other factors contributing to Vietnam’s GDP growth, how this growth was consumed, and what to expect moving forward.
Where it came from
Firstly, that 7.52 percent GDP growth was mostly powered by the services sector, which accounted for about 3.53 percentage points, followed by industry and construction, which contributed 3.27 percentage points.
The remainder was covered by agriculture, forestry, and fisheries and product taxes minus product subsidies.
Dig deeper into those numbers, however, and one sub-sector stands out: manufacturing and processing.
Growing at a rate of 10.11 percent in the first half, manufacturing and processing alone contributed 2.55 percentage points, leaving just .72 percentage points for the remainder of the industry and construction sector.
This would track with firms ramping up production to try and get orders landed in the US before the Trump tariff July 9 deadline.
In contrast, the service sector’s 3.53 percentage point contribution was much more diverse.
The top four contributors, wholesale and retail, transportation and warehousing, information and communication, and finance, banking, and insurance, accounting for about 0.68, 0.64, 0.41, and 0.34 percentage points, respectively.
It’s worth remembering, however, that the services sector is largely dependent on the industrial sector to drive growth.
Transportation and warehousing, for example, needs goods to move and store, wholesalers and retailers need consumers to have jobs to make money to pay for the goods they sell.
That is to say, manufacturing and processing did a lot of the heavy lifting in the first half of 2025.
Where it went
Driving this increased economic output was final consumption, which accounted for about 84 percent (6.33 percentage points) of the overall GDP growth, with another 40 percent (3.02 percentage points) coming from gross capital formation.
In contrast, imports rose faster than exports, resulting in net exports subtracting 1.83 points from overall growth.
How it was paid for
The NSO put total realised investment capital in the first half of the year at VND 1,591.9 trillion or about US$61 billion.
Of the three core components, the domestic private sector accounted for US$34.36 billion or about 54 percent; with government investment accounting for US$17.83 billion or 28 percent, and foreign direct investment realising US$11.49 billion, covering the remaining 10.6 percent.
An important note, however, is that a significant portion of domestic private sector spending looks to have come from private credit.
In fact, credit growth was up 8.3 percent in the first six months of the year over the end of 2024, an increase of roughly US$44 billion.
This is significant in that Vietnam’s GDP over the same period grew by only about US$17 billion.
This means that for every US$1 gained in GDP, it cost US$2.60 in credit.
With one of the highest private credit-to-GDP ratios in the world already (about 135.6 percent at the end of last year), this momentum may prove difficult to maintain moving forward.
What’s next?
The NSO’s first half socio-economic report not only shows an economy expanding at a heady clip but also one that is heavily dependent on manufacturing and processing, and private credit.
This puts Vietnam in a challenging space moving forward.
Not only are US import tariffs likely to lead to a broad downturn in consumption in the US and subsequently demand for goods manufactured in Vietnam, but private credit growth at a rate much faster than GDP is also adding a significant risk burden to Vietnam’s financial sector and, by extension, the economy overall.
That is to say, Vietnam’s 7.52 percent GDP growth in the first half of 2025 may look good at surface level, but there are risks simmering away underneath that may make it difficult to maintain moving forward.