The bank maintains Viet Nam's full year growth forecast at 6.4 percent, which implies 5.2 percent on year in the fourth quarter.

The nation's real GDP growth was stronger than expected in quarter three this year, surging 7.4 percent on year compared to the median consensus view of 6.1 percent and UOB's forecast of 5.7 percent. This is the fastest pace since the third quarter of 2022 when activities had then rebounded sharply from the trough of the pandemic, the UOB noted.

According to the bank, the latest figure extended the revised 7.09 percent gain in the second quarter of this year, resulting in a cumulative 6.82 per cent on year expansion in the first nine months of 2024. The surprise outcome of the third quarter reflected the resilience of the economy, despite the devastation from Typhoon Yagi.

Overall in the third quarter, the services sector was the main contributor to GDP growth with 3.24 percentage points, followed by industrial and construction output with 3.37 percentage points, accounting for 89 per cent of the 7.4 per cent headline figure.

"This suggests that Viet Nam's growth trajectory remains on track. As of October, Viet Nam's exports rose 14.9 per cent on year, maintaining its double-digit momentum so far", highlighted the UOB.

For the full year 2024, UOB projects Viet Nam's exports to rise by 18 percent, which would be the strongest year since 2021.

Imports gained 16.8 per cent on year in January to October, resulting in a trade surplus of US$22.3 billion in the first 10 months to seal its position to be the second-largest trade surplus on record after the US$28 billion in 2023.

Related to this, foreign direct investment (FDI) momentum extended further, with registered FDI inflows at US$27.3 billion in first 10 months of 2024, 2 per cent on year higher than the same period in 2023. Actual FDI inflows amounted to US$19.6 billion as of end-October, and is on track for the third straight year of record FDI inflows.

On the domestic front, the momentum for retail sales has largely held steady so far in 2024, with a gain of 7.1 per cent in October and an average of 8.5 per cent in the first 10 months, comparable to the 10.4 per cent increase in all of 2023.

"However, with the U.S. poised for Trump 2.0, potential of global trade tensions and downside risks may soon emerge. One key risk to watch will be potential trade restrictions against Viet Nam, as the U.S. annual trade deficit with the country ballooned by more than 2.5 times from US$39.5 billion in 2018 to nearly US$105 billion in 2023," the bank noted.

Viet Nam targets a GDP growth rate of approximately 8 percent in 2025 to create momentum for the two-digit growth rate in the 2026-2030 period, Prime Minister Pham Minh Chinh said.

The Government chief underlined that 2025 is regarded as a year of acceleration and breakthrough, focusing on overcoming difficulties and challenges, with economic stability serving as the foundation for driving development.

Viet Nam's GDP expanded by about 7.4 percent in the third quarter and 6.82 percent during the first nine months of 2024 compared to the respective periods of last year./.