Macro/ Strategy

Production surges thanks to a low base

The Industrial Production Index (IIP) increased by 21.5% YoY in January 2026. Specifically, the manufacturing sector increased by 23.6% YoY; electricity production and distribution increased by 14.1%; water supply, waste management and wastewater treatment increased by 13.6%; and mining increased by 10.3%. The high growth in January 2026 was attributable to the last year's low base. January 2025 coincided with the Lunar New Year holiday, resulting in intermittent production activities.

The PMI index for January 2026 reached 52.5 points, extending the streak of consecutive months above 50 since July 2025. Being above 50 points indicates a clear monthly improvement in business conditions.

Exports in January 2026 grew by 29.7% YoY, reaching 43.19 USDbn. Meanwhile, imports increased sharply by +49.2% YoY, reaching 44.97 USDbn. The fact that imports exceeded exports resulted in Vietnam experiencing a trade deficit for two consecutive months. In January 2026, Vietnam's trade deficit reached US$1.7 billion.

Impressive increase in purchasing power due to preparations for the Lunar New Year

Shopping in preparation for the Lunar New Year in February led to positive growth in the economy's consumption in January. In January 2026, total retail sales of goods and consumer service revenue increased by 9.3% YoY. 

Despite pressure from high consumer demand, the consumer price index only increased slightly by 0.05% MoM in January 2026. Headline inflation increased by 2.53% YoY and core inflation increased by 3.19% YoY.

Interbank interest rates soared in early February

In January 2026, interbank interest rates remained at 5-6% for overnight maturities. However, in the first three trading days of February (from the 2nd to the 4th), overnight interbank interest rates surged to 9%, 16.4%, and then returned to 10%. The main reason was the simultaneous occurrence of seasonal factors leading up to the Lunar New Year holiday.