Real GDP growth is projected to moderate to 6.2% in 2026 and 5.8% in 2027 as weaker external demand restrains exports. Private consumption will remain buoyant amid steady increases in real wages and employment, although the planned VAT increase in 2027 is likely to dampen consumption temporarily. Investment growth will be supported by planned increases in public investment and accommodative financial conditions. Inflation is expected to pick up, driven by robust consumption and the one-off VAT rise. As a small trade-dependent economy, Viet Nam remains highly vulnerable to global policy developments.
The monetary policy stance is accommodative but the central bank should monitor inflationary pressures carefully and stand ready to withdraw support. Fiscal policy is expected to be expansionary, with public investment accelerating to achieve the government’s ambitious growth target in 2025 but should eventually turn more neutral. Improvements in the monetary framework could improve capital allocation and bolster growth, in addition to regulatory reforms that ease foreign investment restrictions in services and level the playing field between private and state-owned companies.
