- Production has ramped up ahead of Tet: In January, the overall index of industrial production (IIP) surged 21.5% YoY (January 2026: -1.0% YoY), supported mainly by the manufacturing sub-sector IIP (+23.6% YoY vs +0.5% YoY in January 2026). Encouraging PMI results at the start of 2026, together with improving business sentiment, point to an optimistic outlook for Vietnam’s manufacturing sector this year. Nevertheless, production in February could be disrupted due to the Tet holiday.
- International arrivals hit the highest monthly level: In January, total retail sales grew 9.3% YoY (January 2026: +9.3% YoY). Retail sales of goods rose ahead of Tet while international arrivals surged 18.5% YoY to 2.5 million, supporting the growth of retail sales of accommodation & catering services. We expect overall retail sales to post more positive results in February due to higher consumption, traveling demand, and strong international arrivals during the Tet holiday.
- State budget revenue continued to perform strongly: In January, State revenue and State expenditures were USD14.1bn (+20.4% YoY) and USD6.2bn (+6.4% YoY), respectively, resulting in a fiscal surplus of USD7.9bn. The Prime Minister issued Dispatch 12/CĐ-TTg, directing ministries and local authorities to accelerate public investment disbursement from the start of the year, with the aim of achieving the 100% disbursement target assigned for 2026. However, public investment disbursement could slow in Q1, reflecting typical seasonal patterns.
- FDI disbursement reached the highest January level since 2012: FDI disbursement increased 11.3% YoY to USD1.7bn in January. Meanwhile, FDI registrations dropped 40.6% YoY to USD2.6bn. We see some downside risks to FDI registration due to its decline for three consecutive months. However, FDI registration could pick up in February, supported by a USD1.0bn increase in registered FDI in Bac Ninh in early in the month. In addition, we expect FDI disbursement could continue to increase solidly, supported by the large registration capital during 2023–2025 along with Vietnam’s fundamental advantages and the recent upgrades of diplomatic ties.
- Exports and imports surged at the beginning of 2026: Exports and imports delivered strong growth in January, with exports and imports surging 29.7% YoY and 49.2% YoY, respectively, to USD43.2bn and USD45.0bn, resulting in a trade deficit of USD1.8bn in January (vs a USD3.2bn surplus in January 2026). The latest PMI report showed a rebound in new export orders, which could support export growth in the coming months. Meanwhile, Vietnam recorded a trade deficit for the second consecutive month — a potentially positive signal for production and future exports, as a large share of imports are typically used as intermediate inputs.
- Domestic gasoline prices and prices of fresh, dried, and processed vegetables helped to restrain inflation in January: January’s CPI rose 0.05% MoM and 2.53% YoY. Consumption demand ahead of the Tet holiday (starts from February 16) could rise, especially demand for food, foodstuffs & catering services and traveling, which could add more inflationary pressure in February.
- The VND strengthened against the USD for the second consecutive month: The VND continued to appreciate, rising 1.3% against the USD in January and closed the month at 25,949 in the interbank market. We expect ongoing solid foreign inflows - including FDI, exports, and remittances to continue to support the stability of the USD/VND exchange rate in February.
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