Vietnam: Q1 records slowest increase in GDP in a year
GDP growth eases slightly: GDP growth moderated to 6.9% year on year in the first quarter, from 7.6% in the fourth quarter of 2024, marking the slowest growth since Q1 2024. This reading was slightly lower than markets had expected as industrial and services activity decelerated.
The agricultural sector continues to grow while services and industry contract: The industrial sector grew 7.4% annually in the first quarter, marking the slowest growth in a year and falling short of the previous quarter’s 8.4% growth. The services sector also lost steam, growing 7.7% in Q1 (Q4: +8.2% yoy). On the other hand, the agricultural sector expanded 3.7% in Q1, following the previous quarter’s 3.0% increase.
Economic growth to undershoot government’s target: Our Consensus sees growth slowing from Q1 in the coming quarters and falling short of the official 8.0% target in 2025 as a whole. Our panelists also see full-year economic growth easing from 2024’s level, largely due to weaker exports momentum after the U.S. announced a 10% tariff for Vietnamese exports in early April—exports constitute 90% of Vietnam’s GDP. An additional 36 percentage points of reciprocal tariffs—now paused by the U.S.—pose a downside risk to GDP growth.