Vietnam’s 2026 GDP Forecast Soars to 8% Amid Robust Economic Performance: Citi Analysis
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Citi Research has increased its prediction for Vietnam’s GDP growth in 2026 to approximately 8%, motivated by the country’s better-than-predicted economic performance and sturdy exports. This new forecast was announced during Citi’s economic prospect seminars held for their clients in Hanoi and Ho Chi Minh City on August 11 and 12.
In the second quarter, Vietnam’s GDP experienced a year-on-year growth of 8.5%, a significant increase from the 7.9% growth in the first quarter. This robust performance has led Citi to adjust its annual forecast upwards to about 8%, a notable change given the previous downscale to the low-7% range following the energy-price shock earlier in March.
Exports and Trade Relations
Despite various predictions, Vietnam’s exports have shown more resilience than anticipated. The U.S. alone constitutes about 30% of Vietnam’s exports, with the electronics sector reaping the benefits of considerable global investment in artificial intelligence and digital infrastructure. While exports to the U.S. have decelerated since their peak in 2025, the growth remains significant.
“alone constitutes about 30% of Vietnam’s exports, with the electronics sector reaping the benefits of considerable global investment in artificial intelligence and digital infrastructure.”
Trade relations with China have also seen an upswing. Vietnam’s exports of electronics and components to China have sped up, and imports of electronic inputs, energy, and chemicals have increased. This indicates a deeper integration into regional manufacturing and electronics supply chains.
Domestic Demand and Inflation
Domestic demand has served to balance out external pressures and those related to energy. Real retail sales dipped in early Q2 due to increasing fuel prices but later regained traction as the prices stabilized. Investment in public infrastructure has stayed strong, while the production of construction materials has continued to grow at a double-digit rate, albeit slower than in Q1.
However, inflation continues to pose a potential risk. Consumer price inflation reached a high of 4.7% year-on-year in June. Citi anticipates that inflation may have reached its apex, considering the dip in oil prices and government steps to steady fuel costs. However, it could remain above the 4.5% target in the short term.
Minh Ngo, Citi Country Officer and Banking Head for Vietnam, praised the country’s resilience in the face of a volatile global environment. He emphasized that Vietnam’s expanding trade ties, deeper immersion in global supply chains, and continuous infrastructure investment provide a robust foundation for long-term growth. He assured of Citi’s dedication towards helping clients adapt to changing market trends, access international capital, and seize new cross-border opportunities.
Questions & Answers
Q.What has led to the rise in Vietnam’s GDP forecast for 2026?
What has led to the rise in Vietnam’s GDP forecast for 2026?
This is due to the country’s better-than-expected economic performance and resilient exports.
Q.How has domestic demand contributed to Vietnam’s economy?
How has domestic demand contributed to Vietnam’s economy?
Domestic demand has proved crucial in offsetting external pressures and those related to energy. Real retail sales have recovered, and investment in public infrastructure remains solid.
Q.What are the key risks to Vietnam’s economy?
What are the key risks to Vietnam’s economy?
Potential risks include renewed energy price volatility, weaker global demand, changing international trade conditions, and possible disruption to hydropower generation associated with El Niño.
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