Vietnam Economic News Insight & Recap – May 2026 by GRANT THORNTON

May highlighted two sides of Vietnam’s economy moving at once: growth remained resilient even as cost pressures intensified. FDI reached USD 24.8 billion in the first five months, up 34.9% year on year, while manufacturing PMI rose to a three 52.8 as new orders improved and manufacturers built month high of inventories ahead of expected supply disruptions. At the same time, the Middle East driven energy shock pushed input cost inflation to its fastest pace since April 2011 and lifted five month CPI growth to 4.31% year on year, bringing it close to the government’s 2026 ceiling of 4.5%. Imports also outpaced exports, leaving Vietnam with a trade deficit over the first five months of the year.

Most institutional forecasts for 2026 now come in at the 6.5 – 7.5% range as inflation becomes a more prominent constraint, though growth is still expected to rank among the strongest in the region. These projections, however, remain short of the government’s ambition for double digit growth this year. Vietnam’s response continues to follow two parallel tracks: advancing structural reforms that expand the economy’s capacity and sustaining the investment appeal that has underpinned steady capital inflows. The ongoing development of the International Financial Centre (IFC) reflects the first of these ambitions, with progress across maritime finance, aviation finance and plans for an international stock exchange aimed at broadening Vietnam’s access to capital. Parallel efforts to move up the value chain towards higher value manufacturing, R&D and technology serve the same objective: building an economy defined by more than cost competitiveness. For the rest of 2026, the main challenge will be to keep inflation within target and contain pressure on the trade balance while preserving the investment momentum needed to sustain these ambitions.

Read full PDF below 👇

Thank you @Source by GRANT THORNTON