HÀ NỘI — Mitsubishi UFJ Financial Group (MUFG), one of Japan’s three core financial and banking institutions and among the world’s largest financial groups, has raised its forecast for Việt Nam’s gross domestic product (GDP) growth to 7.7 per cent in 2025 and 8.2 per cent in 2026, up from 6.9 per cent and 7.4 per cent projected in August.

MUFG said the upward revision reflects stronger-than-expected export performance and resilient domestic growth drivers, while also warning of emerging risks related to rapid credit expansion and exchange-rate pressures.

Exports, domestic demand drive growth

In its report “Việt Nam: Modest risk of overheating amidst very positive structural reforms”, MUFG noted that Việt N  am’s exports in 2025 surged by nearly 17 per cent year on year, well above initial expectations. Growth was broad-based, with electronics exports rising about 28 per cent and machinery and equipment up 14 per cent, highlighting Vietnam’s expanding role in regional and global supply chains. The bank attributed part of this momentum to exemptions for certain products, particularly electronics, from US reciprocal tariff measures.

However, MUFG pointed to growing divergence across sectors. Garment and textile exports slowed to around 7 per cent growth in 2025 as of November, compared with 10 per cent in 2024. November alone saw a marginal 0.1 per cent year-on-year increase, reflecting pressure on labour-intensive industries amid weaker global demand and fiercer competition.

Foreign direct investment (FDI) remained robust, with realised FDI rising about 10 per cent in 2025 and newly registered capital staying high, signalling continued foreign investor confidence in Việt Nam’s medium-term outlook.

MUFG’s baseline scenario assumes Việt Nam and the US will sign a formal trade agreement, improving certainty for investment and business activity, though the bank cautioned that negotiations could still face obstacles.

Beyond trade and investment, MUFG stressed that domestic demand and structural reforms remain key pillars of growth. Increased public infrastructure spending and efforts to restore private-sector confidence are expected to support internal demand. The bank described Vietnam’s current reforms as the most ambitious since 1986, gradually addressing long-standing structural bottlenecks.

At the same time, credit growth exceeding 19 per cent year on year in 2025 could heighten overheating risks, especially as Việt Nam targets GDP growth of 8.3–8.5 per cent in 2025 and around 10 per cent in 2026.

Exchange-rate pressures and policy outlook

MUFG warned that Việt Nam’s growth-oriented policy stance may increase depreciation pressure on the exchange rate in 2026, forecasting it may approach VNĐ26,800 per US dollar. Interbank interest rates are expected to stay above 6 per cent throughout 2026 due to strong credit demand, liquidity absorption via open market operations and uneven liquidity distribution in the banking system.

While current interest rates remain relatively low compared with growth prospects, the bank forecasts the State Bank of Việt Nam may raise the refinancing rate once, by about 25 basis points, in the second half of 2026, noting the move would be made cautiously. Expected US Federal Reserve rate cuts in 2026 could help ease pressure on Vietnam’s foreign exchange market.

Overall, MUFG affirmed that Việt Nam’s medium-term structural reform outlook remains highly positive, with effective implementation expected to improve productivity, ease structural constraints and support sustained economic growth. — VNS