Macro/ Strategy

Industrial production and trade accelerate together

Industrial production accelerated to 14.5% YoY in July 2026 (+1.2% MoM) from 12.7% in June, lifting the 7M2026 cumulative pace to 11.4% YoY -- the strongest first-seven-months reading in several years -- with all four sub-sectors, led by manufacturing (+15.0% YoY), growing faster than a year earlier. The PMI corroborated the strength, rising to 52.9 from 51.8 and marking 13 consecutive months at or above the neutral 50 mark, with firms adding staff for the first time in five months. Retail sales grew 14.5% YoY in July (0.9% MoM), a fractional slowdown from June's 14.8%, while foreign arrivals of 1.67 million lifted the 7M2026 total to 13.92 million, 13.8% ahead of last year.

Headline CPI cools as core inflation takes the lead

Headline CPI eased to 4.45% YoY in July 2026 from 4.69% in June and a 2026 peak of 5.60% in May, while core inflation slipped only marginally to 4.63% from 4.69% -- so core now sits 0.18pp above headline, the first such inversion so far this year. Over 7M2026, CPI averaged 4.39% YoY against core of 4.19%. The July deceleration traces almost entirely to transport, whose contribution to the headline rate fell to 0.35pp from 0.51pp in June and a 1.28pp peak in April as world oil prices eased; food and catering also contributed less (1.55pp vs 1.64pp). On a monthly basis CPI fell 0.12%, a second consecutive decline, as gasoline (-4.35%) and cooking gas (-11.41%) offset a 7.90% jump in the compulsory health-insurance contribution that lifted the 'other goods and services' group by 1.96% MoM.

Trade deficit widens as import growth keeps outrunning exports

Imports (USD 56.67bn, +41.4% YoY) outpaced exports (USD 53.08bn, +25.0% YoY) by USD 3.59bn in July 2026, extending Vietnam's run of monthly deficits and pushing the 7M2026 cumulative position to a USD 20.52bn deficit -- a sharp reversal from the USD 10.35bn surplus recorded in 7M2025 -- as import growth (+34.8% YoY) has outrun export growth (+21.7% YoY) throughout the year. By commodity, the deficit is concentrated in two groups: electronics, computers and electrical products bought for capital expenditure, and oil and gasoline, with the latter alone accounting for nearly half of the 7M2026 deficit. Gasoline imports in July rose 10.7% YoY by volume and 59.2% YoY by value, the wider value gap reflecting this month's sharp rise in world oil prices on top of higher volumes.

VND holds firm while short-end rates swing

The free-market USD/VND rate appreciated 1.76% in July 2026 to close at 26,250, leaving the VND essentially flat on a 2026 YTD basis (+0.01%) and among the most stable currencies in the regional comparison set alongside the CNY (+3.36%), well ahead of the THB (-5.99%) and PHP (-4.12%). Domestically, the SBV net-withdrew liquidity through July, and the overnight interbank rate swung from 5.95% to a low of 0.75% before spiking back to 5.72% at month-end, while the 3-month rate stayed anchored above 7.1% throughout. Term rates continued to climb: the average 6-12 month deposit rate reached 6.85% in June from 6.65% in May, with lending rates following to 9.30% from 9.05%.