Vietnam: Solid GDP and easing inflation backdrop – DBS

DBS Group Research forecasts Vietnam’s real GDP to grow 7.8% year-on-year in Q2 2026, matching Q1’s pace, supported by strong electronics manufacturing, AI-driven tech demand, FDI and resilient retail spending. Headline inflation is expected to moderate to 5.0% in June as transport costs ease with lower energy prices, allowing the central bank to keep its refinancing rate steady to support growth.

Robust growth with moderating CPI

"We expect Vietnam’s real GDP to expand by 7.8% yoy in 2Q26, remaining firm compared with 7.8% yoy in 1Q26."

"Growth momentum remained robust in 2Q26, underpinned by strong electronics manufacturing activity and shipments, which benefitted from the global technology upcycle driven by artificial intelligence tailwinds, supportive foreign direct investments, and resilient retail spending, despite challenges from the Middle East conflict and high base effects."

"We anticipate headline inflation to ease to 5.0% yoy in June 2026 from 5.6% yoy in May."

"This moderation primarily reflected receding transport inflation due to the unwinding of global and domestic energy price pressures, amid a de-escalation of Middle East tensions following a US-Iran interim peace deal, while other components such as food and housing remained sticky."

"The central bank’s refinancing rate remained steady in 2Q26, and policymakers have room to maintain this path to support high growth objectives, given easing energy prices and a stable currency, notwithstanding hawkish US Fed expectations."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)