In an assessment released on April 24, the ASEAN+3 Macroeconomic Research Office (AMRO) said growth has been underpinned by strong export-oriented manufacturing, sustained foreign direct investment, and firm domestic demand. However, credit growth has been brisk with incipient signs of risk accumulation, and safeguarding macro-financial stability will require a prudent, well-calibrated policy mix.

This preliminary assessment follows AMRO's annual consultation visit to Vietnam from March 23 to April 3. The mission was led by deputy group head and principal economist Anthony Tan. AMRO director/CEO Yasuto Watanabe and chief economist Dong He participated in the policy discussions and met with the State Bank of Vietnam governor Nguyen Thi Hong and Deputy Minister of Finance Tran Quoc Phuong.

“After an exceptionally strong growth performance last year, Vietnam’s economic growth is expected to soften to around 7.2 per cent in 2026−2027, as the tailwinds from last year’s robust external demand gradually fade,” said Tan. “Domestic demand is expected to remain resilient, underpinned by continued policy support, including the extended VAT rate reductions and planned public infrastructure spending.”

Inflation has remained contained so far, staying below the government’s operating ceiling of 4.5 per cent. However, escalating tensions in the Middle East since February 28 have driven up global energy prices, prompting a sharp increase in retail fuel prices in Vietnam in early March. Continued strong credit growth and rising public expenditures are also expected to add to price pressures.

On the external position, Vietnam’s current account surplus remained at a record high of 6.7 per cent of GDP in 2025, supported by resilient goods exports and strong remittances. At the same time, there were sizable capital outflows.

Budget performance in 2025 reflected stronger-than-targeted revenue collection alongside sluggish expenditure execution. Revenue outperformance was mainly driven by capital inflows from accelerated land-use transactions following the enactment of key land and housing laws. Meanwhile, expenditures increased moderately compared to the previous year. The fiscal position is expected to strengthen, with a small surplus of 0.9 per cent of GDP in 2025.

Vietnam confronts an increasingly challenging risk environment. The surge in energy prices has emerged as the most salient external shock, overshadowing tariff-related uncertainties. Prolonged high energy prices could materially impact growth by driving inflationary pressures and dampening domestic demand.

While the growth model continues to deliver strong performance, the country is increasingly exposed to growing trade tensions, particularly as supply chains face heightened scrutiny from the US and other major markets. Rapid credit expansion has also increased financial vulnerabilities and sensitivity to shifts in liquidity and funding conditions.

The growing linkage between capital flows, liquidity, and domestic financial cycles has heightened the economy’s exposure to external shocks, intensifying the trade‑off between sustaining growth and preserving macro‑financial stability.

Vietnam’s near-term macro‑financial conditions call for a prudent, well-calibrated policy mix to stabilise growth while containing emerging risks. Fiscal policy should prioritise provision of targeted support to vulnerable sectors amid rising energy prices over broad-based expansion, with emphasis on effective spending that does not exacerbate macro‑financial pressures.

Strong growth alongside emerging financial imbalances points to the need for an unwinding of accommodative monetary policy, while closely monitoring liquidity and foreign exchange conditions. Financial regulators and supervisors should exercise stronger macroprudential oversight particularly on real estate and household lending.

Over the longer term, the policy agenda should focus on three inter-related priorities. First, Vietnam should accelerate domestic industrial upgrading by deepening FDI−local linkages and raising further domestic value-added content. Second, the country should strengthen policy frameworks in tandem with growing economic complexity, including modernising monetary and financial policy frameworks, revenue mobilisation, and public investment management. Third, the country should advance financial sector and capital market reforms to create credible domestic investment opportunities, improve capital allocation, and reduce incentives for speculative capital outflows.