Macro/ Strategy

GDP growth started strongly

Vietnam aims for double-digit growth in 2026, and Q1 GDP started strongly with a 7.83% YoY increase. The service sector contributed 50.32% to the overall increase in added value; the industrial and construction sector contributed 44.08%; and the agriculture, forestry, and fisheries sector contributed 5.60%.

The service sector grew 8.18% YoY thanks to increased consumer demand during the Lunar New Year and a surge in international visitors to Vietnam. The industrial and construction sector maintained a positive growth trend, and construction activity flourished thanks to accelerated disbursement of public investment capital. The agriculture, forestry, and fisheries sector showed stable growth thanks to good perennial crop production, pig farming recovery, and increasing aquaculture production.

The Iran war raised concerns about inflation and supply chains

Domestic gasoline prices increased by nearly 50%, impacting the consumer price index (CPI) in March. The overall CPI increased by 4.65% YoY in March 2026. The transportation group index saw the strongest increase that month, rising by 10.8% YoY and 12.9% MoM.

The PMI also decreased from 54.3 points in February to 51.2 points in March. Although order volume and order quantity increased, the effects of the trade war influenced other factors. Extended delivery times and increased input costs forced suppliers to adjust output prices. This raised concerns about a future decline in customer demand.

Interest rates are gradually rising

In March, the average 12-month deposit interest rate of state-owned commercial banks increased by 70bps, reaching 5.9% at the end of the month. The interest rate spread on 10-year government bonds between Vietnam and the US also narrowed to almost zero in March. By the end of March 2026, the spread was only 0.2%.