Singaporean lender United Overseas Bank (UOB) has raised its forecast for Vietnam’s GDP growth this year to 8.5%, an increase from its previous estimate of 7%. This adjustment comes after Vietnam’s economy demonstrated a remarkable growth rate of 8.18% in the first half of 2026, the highest in Southeast Asia and significantly above UOB’s earlier expectations.

The strong performance is attributed to broad-based growth across industrial, construction, services, and agricultural sectors. Manufacturing has been a key driver of this growth, particularly due to the surging global demand for artificial intelligence technologies. UOB noted that foreign direct investment (FDI) reached an impressive US$34.7 billion in the first six months of the year, marking a 61% increase, which reinforces the outlook for a record year in FDI attraction for Vietnam.

Despite facing challenges from geopolitical tensions in the Middle East, Vietnam’s economy has shown remarkable resilience, providing a solid foundation for growth in the second half of the year. UOB’s optimistic forecast aligns with the Asian Development Bank's recent report, which also predicts Vietnam to be the fastest-growing economy in Southeast Asia at 7.2% for the year.

The Vietnamese government has set a target for at least 10% growth this year, with an ambitious scenario requiring 11.9% growth in the latter half. UOB is closely monitoring global developments, particularly U.S. tariffs set to take effect later this month, which could impact global trade and Vietnam’s growth trajectory.

In terms of currency stability, UOB highlighted the exceptional resilience of the Vietnamese dong in June, despite a general weakness among Asian currencies. The bank anticipates that the dong will remain relatively stable, with potential strengthening against the dollar, projecting rates of 26,500 in the third quarter and 26,400 in the fourth quarter.

UOB ranks as the third largest lender by assets in Singapore, following DBS Group and OCBC Bank.