OECD affirms that Viet Nam will remain one of Asia's top-performing economies despite external headwinds in 2026

OECD affirms that Viet Nam will remain one of Asia's top-performing economies despite external headwinds, supported by solid domestic demand, public investment and continuing FDI inflows.

Despite expected moderation, Viet Nam continues to demonstrate strong macroeconomic stability and resilient growth momentum.

OECD praised Viet Nam's economic performance in 2025 in which GDP grew 8.2 percent in Q3 2025, driven by consumption, investment and solid export performance. Unemployment remains at a record low 2.2 percent, with rising labor force participation.

However, OECD warns that risks of external demand is projected to soften from 2026, posing risks for exports. Private consumption remains firm but may slow temporarily in 2027 due to a planned VAT hike. Inflation is expected to edge up with higher domestic demand, administrative price adjustments and the VAT change.

Exports remain robust, expanding 15.5 percent in the first nine months of 2025; shipments to the U.S. surged 27.7 percent. FDI inflows continue to strengthen, supporting technology transfer and productivity improvements.

The OECD advises that while fiscal policy needs to continue supporting the economy (especially public investment to help reach the 8 percent growth target for 2025), Viet Nam should gradually return to a neutral stance in the medium term due to rising inflationary pressures. The reduced VAT incentive (from 10 percent to 8 percent) is scheduled to end by late 2026.

To sustain long-term growth, the OECD suggested Viet Nam strengthen institutional reforms to improve productivity and the quality of growth. Key recommendations include: (1) Refining the monetary policy framework to be more market-signal-based; (2) Further opening the service market and reducing barriers for foreign investors; (3) Enhancing competition between private and state-owned enterprises; (4) Creating incentives to reduce the informal labor sector, which accounts for about two-thirds of the workforce, to expand social security coverage and boost overall productivity; (5) Encouraging domestic enterprises to climb higher on the value chain of global supply networks.   

In its previous Economic Outlook Report released on June 3, OECD predicted Viet Nam's GDP growth at 6.2 percent in 2025 and 6 percent in 2026./.