The Vietnam Economic report was presented at Citi’s economic outlook seminars for clients held in Hanoi and Ho Chi Minh City on August 11 and 12, respectively.

Vietnam’s GDP growth accelerated to 8.5 per cent on-year in the second quarter, from 7.9 per cent in Q1. The stronger-than-expected performance prompted Citi to raise its full-year forecast back to around 8 per cent, after previously lowering it to the 7 per cent range following an energy-price shock in March.

Minh Ngo, Citi Vietnam’s country officer and banking head for Vietnam. Photo: Citi

In light of the report, Vietnam’s export performance has remained more resilient than initially anticipated. The United States accounts for approximately 30 per cent of Vietnam’s exports, with electronics playing an increasingly important role amid strong global investment in AI and digital infrastructure.

Although growth in exports to the United States has moderated from its 2025 peak, it remains elevated.

Two-way trade with China has also strengthened. Vietnam’s exports of electronics and components to China have accelerated, while imports of electronic inputs, energy and chemical products from China have increased, reflecting the country’s deeper integration into regional manufacturing and electronics supply chains.

Domestic demand has helped cushion the external and energy-related headwinds. Real retail sales weakened in early Q2 as fuel prices rose, but recovered relatively quickly as prices stabilised. Public infrastructure investment has continued at a high level, while production of construction materials maintained double-digit growth despite some moderation from Q1. .

Inflationary pressure remains a key concern. Vietnam’s consumer price inflation stood at 4.7 per cent on-year in June. Citi believes inflation has probably passed its peak following the decline in oil prices and government measures to stabilise domestic fuel costs, although it may remain above the 4.5 per cent target in the near term.

Minh Ngo, Citi Vietnam’s country officer and banking head for Vietnam, said Vietnam continues to demonstrate impressive resilience in a volatile global environment.

"Its expanding trade relationships, deeper participation in global supply chains and sustained investment in infrastructure provide a strong foundation for long-term growth," Ngo said. “Through Citi’s global network and local capabilities, we remain committed to helping clients navigate changing market conditions, access international capital and capture new cross-border opportunities.”

Key downside risks to Vietnam’s economic outlook include renewed energy-price volatility, weaker global demand, changing international trade conditions, and possible disruption to hydropower generation associated with El Niño.

Nevertheless, Citi expects exports, investment and domestic demand to continue supporting Vietnam’s economic growth through the remainder of 2026.