HANOI: Vietnam has entered 2026 with a bold ambition: sustaining double-digit economic growth as it moves into a new development phase.
The target, endorsed at the 14th National Party Congress for the 2026 to 2030 term, calls for average annual gross domestic product (GDP) growth of 10% or more.
It reflects a long-term vision of becoming a high-income economy by 2045.
The aspiration is not without foundation.
Vietnam’s political stability, deep integration into global trade and ongoing efforts to restructure its growth model provide a credible base.
Yet, the external environment has rarely been more volatile.
Two powerful headwinds – escalating global trade tensions and a renewed energy shock linked to conflict in the Middle East – are converging at a critical moment.The early data for 2026 show both promise and pressure.
GDP expanded by 7.83% in the first quarter (1Q), up from 7.07% a year earlier.
Growth was broad-based. Industry and construction rose 8.92%, contributing 44.08% to overall expansion.
Services increased 8.18%, accounting for over half of growth.
On the demand side, investment remained a key driver.
Total social investment reached 744.7 trillion dong (over US$28bil), up 10.7% year-on-year (y-o-y). The private sector led with 54.1% of total capital, followed by the state sector at 27.8% and foreign-invested enterprises at 18.1%.
Public investment disbursement also accelerated, rising 12.1%.
Foreign direct investment (FDI) inflows were particularly strong.
Registered FDI surged 42.9% to US$15.2bil in the 1Q, while disbursed FDI reached a five-year high of US$5.41bil, up 9.1% y-o-y.
These figures suggest that Vietnam’s growth engine remains intact.
However, they also mask a more complex reality.
The 1Q largely reflected existing export orders placed before global disruptions intensified.
The real test will come in subsequent quarters, when the full impact of external shocks feeds through.
The challenge is immediate.
According to the Government’s Resolution 01 issued early this year, GDP growth targets were set at 9.1% for the 1Q and above 10% for the remaining quarters.
The shortfall in the 1Q implies a steep acceleration is required – a difficult task under tightening global conditions.
Two external shocks stand out.
First, the United States has escalated trade tensions through new Section 301 investigations targeting 16 major trading partners, including Vietnam.
The move signals a shift toward more aggressive unilateral trade measures, with potential tariffs and restrictions aimed at addressing alleged excess industrial capacity.
For an export-dependent economy like Vietnam, such actions introduce significant uncertainty for manufacturing and trade flows.
Second, the conflict in the Middle East has triggered a sharp rise in energy prices and disrupted global supply chains.
The Asian Development Bank (ADB) warns that the conflict is affecting Asia through higher energy costs, logistics disruptions and tighter financial conditions.
In its March report, ADB outlines three scenarios, with impacts depending on how long the conflict persists.
If tensions ease quickly, the effects remain limited.
But in a prolonged and severe scenario, growth in developing Asia could fall by up to 1.3 percentage points, with inflation rising sharply.
South-East Asia, including Vietnam, would be among the most affected, with cumulative growth potentially reduced by up to 2.3 percentage points over 2026 to 2027.
The implications for Vietnam are substantial.
As a net energy importer with a highly open economy, Vietnam is particularly exposed to rising oil prices and global trade disruptions.
Higher energy costs feed directly into inflation, production costs and transport expenses.
At the same time, supply chain disruptions can delay exports and increase logistics costs. Domestic indicators already reflect early signs of strain.
Inflation rose above 4% in March, reaching 4.65%.
This has forced monetary policy to shift from an accommodative stance toward neutrality, limiting the scope for further stimulus.
Retail sales remained resilient in nominal terms, rising 12.1% y-o-y in March.
However, after adjusting for price increases, real growth was significantly lower, indicating weakening purchasing power.
Business sentiment is mixed.
A survey of manufacturing firms shows that only 23.8% reported improved conditions in 1Q, while 30.1% experienced difficulties.
Although expectations for 2Q are more positive, uncertainty remains high.Enterprise dynamics also point to a fragile recovery.
Nearly 22,000 new firms were established in March, but the number of firms exiting or suspending operations remained elevated.
The gap between business entry and exit is narrowing, reflecting ongoing structural pressures.
Against this backdrop, economic scenarios for 2026 highlight the scale of the challenge. — Viet Nam News/ANN
