- Production remains resilient, but forward indicators have softened: The overall industrial production index (IIP) continued to increase solidly at 9.2% YoY in 4M 2026 (4M 2025: +8.6% YoY), driven by the strong performance of the manufacturing sub-sector at 9.9% YoY (4M 2025: +10.6% YoY). However, the decline in new orders in the latest PMI suggests moderating momentum, while rising cost pressures could weigh on the near-term outlook of Vietnam’s manufacturing sector.
- Retail sales continued posting double-digit growth but were mainly price-driven: Total retail sales rose 11.1% YoY in nominal terms but only 6.3% YoY in real terms (vs 7.2% in 4M 2025), indicating that price effects were the main driver. The higher tax threshold under Decree 141/2026/ND-CP could provide some support to consumption by benefiting around 2.56 million business households. However, prolonged inflationary pressures may weaken consumer demand over time.
- State budget completed 44% of annual plan in 4M 2026: The State budget recorded a surplus of USD16.9bn (+28% YoY), with revenue reaching 44% of the annual plan. State spending for investment and development surged 16.4% YoY to VND153.2tn (USD5.8bn), completing 13.7% of the annual plan (vs an average of 16.3% in 4M 2018-2025). We expect further acceleration, supported by stronger policy direction and improved implementation mechanisms.
- FDI disbursement continued accelerating in April: In 4M 2026, FDI registration surged to USD18.2bn (+32.0% YoY) while FDI disbursement maintained strong growth momentum at USD7.4bn (+9.8% YoY). We expect FDI disbursement to remain strong, supported by previously registered capital and recent developments such as Intel’s production shift to Vietnam, the signing of 73 cooperation agreements with South Korea firms, and upgraded Vietnam–India diplomatic ties.
- Trade deficit widened sharply amid strong import demand: Vietnam recorded a record monthly trade deficit of USD3.3bn in April, driven partly by rising fuel imports (USD3.4bn in 4M 2026, 2.1x YoY). In 4M 2026, exports grew 19.7% YoY while imports rose faster at 28.7% YoY, resulting in a cumulative deficit of USD7.1bn — the largest 4M deficit since our data tracking began in 2011. While rising imports also partly reflect resilient production demand, the scale of the deficit and elevated energy imports point to increasing external vulnerability.
- Domestic gas, dining out, and construction materials prices drove April’s CPI: April’s CPI rose 5.46% YoY (+0.84% MoM), lifting the average CPI to 4.0% in 4M 2026. On May 5, US Secretary of State Marco Rubio stated that the US had ended its military campaign against Iran, while ceasefires remained in place as of May 8. Improved prospects for a US–Iran agreement helped push oil prices down 12.2% from end-April to May 8. The recent decline in global oil prices, following easing Middle East tensions, could help moderate inflation pressures in the near term, although risks remain elevated.
- The USD/VND exchange rate remained stable in April: The USD/VND exchange rate was nearly unchanged in April, closing the month at 26,348 (the VND has depreciated around 0.2% against the USD YTD). While strong import demand may continue to exert pressure, a softer USD, easing geopolitical tensions, and solid FDI inflows could help stabilize the exchange rate in the near term.
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