The World Bank has revised its forecast for Vietnam’s economic growth, citing the impact of US tariffs on the country’s exports. The new forecast predicts a growth rate of 6.6% for this year, down from the previous estimate of 6.8%. This reduction is attributed to the normalization of export growth after a strong performance in the first half of the year.

According to a Reuters report, the World Bank’s revised forecast is significantly lower than the Vietnamese government’s official target of 8.3-8.5% growth. The bank noted that as an export-oriented economy, Vietnam remains vulnerable to slower global growth and softening demand from major trading partners. Additionally, trade-policy uncertainty may begin to weigh on business and consumer confidence.

The US, Vietnam’s largest export market, imposed a 20% tariff on Vietnamese goods starting August 7, with transshipments from third countries facing a 40% levy. Oxford Economics reported that Vietnam’s goods export values contracted 3.6% in August from the previous month. However, government data showed that August exports rose 14.5% from a year earlier and were up 2.6% from July.

The pace of export growth is expected to continue easing due to tariff effects, but the electronics sector is likely to offer some resilience. The World Bank projected that economic growth will ease to 6.1% in 2026 before accelerating to 6.5% in 2027, supported by a recovery in global trade and Vietnam’s continued appeal as a competitive manufacturing base.

Prime Minister Pham Minh Chinh warned that global trade tensions, geopolitical and military conflicts, are affecting production and supply chains, and mounting pressure on inflation and the exchange rate. Despite this, domestic activity remains strong, with consumption and government-led investments expected to continue supporting growth even as export growth eases further.

The revised forecast highlights the challenges faced by Vietnam’s export-driven economy in the face of global trade tensions. As the country navigates these challenges, it remains to be seen how the government will respond to support economic growth and maintain its competitive edge in the global market.