Standard Chartered assess Vietnam's performance in first six months of 2026

The assessment, published on June 23, noted that following a strong start to the year, growth is moderating against a more complex global backdrop, including rising inflationary pressures and shifting trade dynamics. Despite these near-term challenges, the country's economic fundamentals remain supportive of steady growth.

“This current economic backdrop is notably complicated by a widening trade deficit, which has expanded to $13 billion in the first five months, against a $5 billion surplus recorded during the same period last year,” stated the report.

Given these developments, Standard Chartered expects the policy rate to remain steady at 4.5 per cent for the rest of 2026. June’s Consumer Price Index is believed to have remained above the government’s 4.5 per cent target, with this trend set to persist into the second half. The second quarter’s inflation is forecasted to rise above 5.0 per cent on-year, compared to 3.5 per cent in the first quarter, driven largely by rising prices in transport, food, housing, and construction materials.

“Additionally, macroeconomic indicators for June may point to a moderation in economic activity, with retail sales growth expected to slow to 8.2 from 11.8 per cent in May, export growth easing to 16.2 from 18 per cent, and industrial production growth decelerating to 5.2 from 8.8 per cent,” stated in the report.

Meanwhile, Standard Chartered pointed out that import growth is likely to have continued accelerating, rising to 45 from 33.8 per cent, potentially widening the trade deficit to $7.3 billion from $5.2 billion.

“Vietnam’s economic performance in the first half of 2026 reflects both resilience and ongoing challenges. We expect the policy rate to remain unchanged and anticipate inflationary momentum to continue through the second half of the year. Despite the moderation in some indicators, Vietnam’s economy is poised to navigate these headwinds with steady growth,” said Tim Leelahaphan, senior economist for Vietnam and Thailand at Standard Chartered Bank.

Earlier, in a report released in early June, the Macroeconomic and Forecasting Department under the Institute of Strategy and Policy on Economic and Financial Affairs, under the Ministry of Finance, noted that despite encouraging economic indicators, macroeconomic challenges remain.

“The business environment is undergoing a significant shakeout, with the number of newly established and reactivated enterprises rising by 50.7 per cent on-year to 119,400 during the first four months, while the number of firms exiting the market nearly doubled. This reflects an intensive restructuring process in which small businesses, financially vulnerable firms, and those heavily reliant on leverage are facing the greatest pressure,” the report analysed.

The report also pointed to the re-emergence of a trade deficit, which reached $7.11 billion in the first four months, largely driven by rising imports of machinery and components for production. However, petroleum import values surged by 105.5 per cent amid volatile global energy prices, placing considerable pressure on both the exchange rate and production costs. At the same time, Vietnam’s growth model, which relies heavily on importing raw materials from China for exports to the US, has made the economy increasingly vulnerable to geopolitical disruptions.

To achieve double-digit growth in the remaining quarters of the year, the Macroeconomic and Forecasting Department of the Institute of Strategy and Policy on Economic and Financial Affairs said Vietnam would need to implement a comprehensive package of innovative measures encompassing macroeconomic management, institutional reform, and improvements in corporate competitiveness. Although GDP expanded by 7.83 per cent in the first quarter, the economy still requires additional growth drivers to overcome cost pressures, external headwinds, and sustain the recovery momentum.

“First and foremost, maintaining macroeconomic stability must remain the top priority. The government needs to closely coordinate flexible monetary policy with targeted expansionary fiscal measures to keep inflation around the 4.5 per cent target, while addressing exchange rate pressures and the widening trade deficit. More flexible adjustments to taxes and fees on petroleum products and production inputs could also help ease cost-push inflation,” the report stated.

At the same time, the report stressed the need to restore corporate health, particularly among small and medium-sized enterprises, which are currently under the greatest strain. Measures such as tax deferrals, reductions in land rental fees, and the expansion of concessional lending programmes need to be implemented more effectively to help businesses overcome cash-flow constraints and high financing costs.

Accelerating institutional reforms, streamlining administrative procedures, and promoting digital transformation were also identified as critical solutions to reduce compliance costs, improve productivity, and strengthen business resilience amid intensifying competition.

From a longer-term perspective, the Institute said Vietnam needs to improve the quality of overseas funding by prioritising high-tech sectors, semiconductors, and AI, while accelerating public investment disbursement, particularly for logistics and energy infrastructure projects. Enhancing human capital will be a decisive factor in fully capitalising on the new wave of next-generation foreign investment.

“Alongside investment-driven growth, stimulating domestic consumption should also be prioritised to create a more balanced growth model. Measures such as tax cuts, consumption stimulus programmes, and the promotion of domestic tourism could help boost purchasing power and reduce dependence on exports,” the report added. “Finally, amid rising geopolitical risks and global market volatility, Vietnam should continue diversifying its export markets, making full use of free trade agreements, and proactively developing contingency scenarios to strengthen the economy’s resilience and self-reliance.”

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