Vietnam's economy accelerated in the second quarter of 2026, prompting Singapore-based UOB Bank to upgrade its full-year GDP growth forecast to 8.5% from 7.0%, citing stronger-than-expected economic performance and robust demand for artificial intelligence (AI).

According to UOB's latest report on Vietnam's economic growth in the first half of 2026, the country's GDP expanded 8.39% year-on-year in the second quarter, up from 7.94% in the first quarter. This lifted first-half GDP growth to 8.18%.

The result significantly exceeded UOB's previous expectations despite prolonged geopolitical tensions in the Middle East and elevated energy prices, reflecting broad-based expansion across the industrial, construction, services and agricultural sectors.

Manufacturing remained the primary driver of growth in the second quarter, supported by surging global demand for AI-related products. Citing data from Vietnam's National Statistics Office, UOB said industrial production rose 10.8% in the first six months of the year, compared with 8.7% in the same period of 2025. Manufacturing and processing output increased 11.4%, making the largest contribution to overall industrial growth.

The bank also noted that global supply chain diversification continued despite geopolitical uncertainty and rising energy costs. Registered foreign direct investment (FDI) reached nearly $34.7 billion in the first half of 2026, up 61% from $21.5 billion a year earlier.

According to UOB, the strong growth in registered FDI points to a healthy pipeline of future disbursements and reinforces expectations that 2026 could become Vietnam's record year for attracting foreign investment.

UOB said Vietnam remains the fastest-growing economy in ASEAN, with regional peers posting growth of between 2.8% and 6.0% in the first quarter and likely recording slower expansion in the second quarter. Supported by stronger-than-expected first-half growth, sustained AI momentum and easing energy prices, the bank raised its 2026 GDP forecast to 8.5%.