VIETNAM MACRO UPDATE: 1H2026 REVIEW AND 2H OUTLOOK

Key highlights:

Vietnam’s economy recorded positive growth in the first half of 2026. Despite facing a range of domestic and external challenges, the economy maintained a solid recovery momentum and remained committed to pursuing the double-digit growth target for 2026. Key highlights include:

• Vietnam’s economy continued to maintain positive growth momentum in Q2 2026, with GDP expanding by 8.39% YoY. Cumulatively, GDP grew by 8.18% YoY in the first six months of the year, providing an important foundation for pursuing a high full-year growth target in 2026.
• Industrial production continued to serve as a key driver of the economy. The Index of Industrial Production, or IIP, was estimated to increase by 3.5% MoM and 12.7% YoY in June. Manufacturing and processing grew by 12.6%; water supply, waste and wastewater management increased by 16.6%; electricity generation and distribution rose by 8.7%; while the mining sector expanded by 8.8% YoY.
• Domestic consumption continued to improve, reflecting sustained positive domestic demand. Total retail sales of goods and consumer service revenue at current prices reached an estimated VND 3,889.5tn in the first six months of 2026, representing an increase of 12.9% YoY.
• International trade recorded strong growth, with total merchandise import and export turnover reaching USD 549.69bn, up 27.1% YoY. Exports increased by 21%, while imports rose by 33.4%, resulting in a trade deficit of USD 16.65bn. The deficit mainly reflected higher demand for imported raw materials and machinery used for production and investment.
• Inflation remained relatively well controlled despite pressures arising from energy-price volatility amid geopolitical tensions in the Middle East. In June, the CPI declined by 0.39% MoM. On average, CPI increased by 4.38% YoY in the first six months of 2026, while core inflation rose by 4.12%, indicating that the overall price level remained within the Government’s control.
• Public investment disbursement continued to accelerate, contributing to economic growth. As of 30 June 2026, total disbursed public investment reached VND 356,935.1bn, equivalent to 35.5% of the plan assigned by the Prime Minister. This leaves considerable room to support construction and infrastructure investment activities in the second half of the year.

Regarding the outlook for the second half of the year, we maintain the economic growth scenarios presented at the beginning of the year. We assign an approximately 50% probability to GDP growth of 10.0–10.5%, a 40% probability to growth of 8.0–8.5%, and a 10% probability to growth of only 6.5–7.0%.