Vietnam’s economy expanded by 8.39% year-on-year in the second quarter of 2026, surpassing forecasts and building on a strong 8.46% growth in the fourth quarter of 2025. This robust performance was fueled by momentum in manufacturing, investment, and trade. The first-half growth for 2026 reached approximately 7.31%. This growth occurred despite prevailing U.S. tariffs, which had been a point of negotiation between the two countries, with a negotiated trade framework and a potential lower tariff of 10% on Vietnamese exports.
However, this growth was accompanied by a significant increase in the trade deficit. In May 2026, the deficit widened to a record $5.21 billion, exceeding the median estimate of a $3.98 billion shortfall and the revised April deficit of $3.99 billion. Overall, in the first five months of 2026, total import-export turnover reached $445.12 billion, a 25% year-on-year increase. Exports rose 19.5% to $215.66 billion, while imports surged 30.8% to $229.46 billion, resulting in a five-month trade deficit of $13.8 billion, compared to a $5.1 billion surplus a year earlier. This import surge was largely attributed to rising global raw material prices, potentially exacerbated by global conflicts.
Industrial production demonstrated consistent strength, with the Index of Industrial Production (IIP) rising 8.8% year-on-year in May and 9.1% over the first five months of 2026—the highest growth rate in four years. Manufacturing and processing, a key driver, expanded by 9.5%, contributing 7.4 percentage points to overall industrial growth. Foreign direct investment (FDI) also played a crucial role, with registered FDI reaching $24.81 billion, up 34.9% year-on-year, and disbursed FDI hitting $9.75 billion, a 9.6% increase and the highest level in five years, primarily flowing into manufacturing and processing. Domestic consumption and international tourism also contributed positively to the economic expansion.
