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UOB has revised Vietnam’s GDP growth forecast for this year to 7% from 7.5%, citing an energy shock linked to the Middle East. In a report released by United Overseas Bank, the bank said the “energy shock arising from the Middle East is creating short-term pressure on Vietnam as well as many other Asian economies.”
UOB noted that Brent crude prices have been oscillating around $100–$110 per barrel, with higher energy costs directly affecting Vietnam’s transport and logistics sectors.
Beyond energy prices, the bank pointed to bottlenecks at the Hormuz Strait, which can affect the supply of essential inputs across sectors including agriculture, construction, plastics, semiconductors and healthcare. As a result, UOB said the risk of broader supply-chain disruptions is increasing.
UOB also flagged U.S. trade policy as another factor to monitor, noting that Vietnam and other countries may face trade investigations, including under Section 301 and related regulations.
Mr. Suan Teck Kin, Head of Global Market and Economic Research at UOB, said the Middle East conflict is influencing energy prices and the ability to secure supply. “This means enterprises incur higher energy and other input costs, raising operating costs and placing production and business activities at greater risk,” he said.
UOB assessed that Vietnam’s Q1 GDP growth was 7.83%, “above expectations,” compared with UOB’s forecast of 7% and Bloomberg’s 7.6%. The bank said economic activity in the first three months continued to be supported by manufacturing and processing, construction and services.
However, reflecting the war’s impact, UOB cut its growth forecasts for Q2, Q3 and Q4 to 6.5%, 6.8% and 7% respectively.
This year, the Vietnamese government has set a GDP growth target of 10%. UOB said reaching that target would require the economy to grow at least 10% in each of the remaining quarters.
Mr. Suan Teck Kin said a positive development is that the government has identified infrastructure as one of the biggest constraints on growth. “This is a key factor in boosting productivity, efficiency and simultaneously accelerating aggregate demand. Therefore, public investment is being boosted in many sectors,” he said.
Separately, UOB noted that on 10 April the Asian Development Bank (ADB) forecast Vietnam’s 2026 GDP growth at 7.2%.
On monetary policy, UOB expects the State Bank of Vietnam to keep the policy rate unchanged at 4.5%. The bank said inflation is expected to continue rising in the months ahead, mainly due to supply-side factors, and therefore tightening policy is not viewed as an appropriate response.
Instead, UOB said the burden of response will largely fall on the government through measures to mitigate the impact as price pressures and supply shortages ripple through the economy.
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