- Production strengthened further in July: The overall Industrial Production Index (IIP) expanded further, surging 14.5% YoY, bringing total IIP to increase 11.4% YoY, supported by the manufacturing sub-sector, which surged 12.0% YoY. According to the latest PMI survey, stronger new orders, particularly export orders, point to sustained export and manufacturing momentum in the coming months.
- July retail sales remained robust, although higher prices continued to drive headline retail sales growth: Total retail sales increased 13.1% YoY in 7M 2026 (7M 2025: +9.5% YoY). However, real retail sales grew 7.5% YoY, inching up from 7.4% YoY a year earlier. We expect domestic consumption to improve in the coming months, supported by stronger tourism, seasonal demand, higher public-sector incomes, and improving employment.
- State revenue completed 73% of annual plan in 7M 2026: The State budget recorded a surplus of USD17.9bn (+81% YoY), with revenue reaching 73% of the annual plan. State spending for investment and development surged 23.7% YoY to USD15.9bn, completing 37.4% of the annual plan (vs an average of 33.2% in 7M 2018-2025). Despite implementation bottlenecks, the Government is piloting a KPI-based system to accelerate public investment disbursement, which remains a key driver of economic growth.
- FDI inflows remained robust in July and 7M 2026: In July, FDI registration jumped 32.3% YoY to USD3.4bn. In 7M 2026, total FDI registrations surged 58.0% to USD38.1bn. Meanwhile, FDI disbursements increased 15.4% YoY to USD2.2bn in July, resulting in a disbursement of USD15.2bn (+11.8% YoY) in 7M 2026. We expect both registered and disbursed FDI to remain strong, supported by ongoing investment commitments and project implementation.
- Trade remained robust, but the trade deficit widened further: In 7M 2026, both exports (USD319.5bn; +21.7% YoY) and imports (USD340.1bn; +34.8% YoY) maintained robust growth, leading to a cumulative trade deficit of USD20.5bn. The widening trade deficit was driven primarily by a surge in imports of PCs and electronics and petroleum products. According to the latest PMI, new export orders rose for a third straight month, signaling stronger exports during the August–November peak season, which could help narrow the record-high trade deficit.
- July’s CPI eased for the second consecutive month: July’s CPI rose 4.45% YoY (-0.12% MoM) and 4.39% YoY in 7M 2026, mainly due to the decline in domestic gasoline and gas prices. Inflationary pressures could pick up in August, driven by (1) stronger end-of-summer holiday demand, (2) university tuition hikes for the 2026–27 academic year, and (3) domestic gasoline prices averaging 8.6% above July’s levels, which could add around 0.3 ppt to headline CPI if prices remain unchanged.
- The VND appreciated against the USD in July: The USD/VND exchange rate remained stable in July, trading within a narrow range of 26,254–26,335. The VND appreciated 0.1% against the USD, closing the month at 26,296 in the interbank market and remaining broadly unchanged from end-2025. The stability was supported by a weaker DXY (-1.3%), VND appreciation in the black market (+1.7%), and resilient FDI inflows. While the record-high trade deficit could add pressure on the exchange rate, solid FDI disbursement growth (+11.8% YoY in 7M 2026) and a stable black-market exchange rate should help mitigate risks.
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