Vietnam government has responded swiftly to energy supply disruptions: ADB country director

Shantanu Chakraborty, ADB country director for Vietnam, has praised the Vietnamese Government on its having responded swiftly to the energy supply disruptions triggered by Middle East tensions.

"Time-bound fiscal measures, including tax relief, use of the stabilization fund, combined with flexible price adjustments and stronger supply coordination, have helped contain near-term inflationary pressures and provided support for growth," he said at a Friday press meeting in Hanoi on Asian Development Outlook – Vietnam Economic Forecasts.

Over the longer term, Chakraborty suggested, improving efficiency, diversifying energy sources, and accelerating the transition to clean energy will be critical to reducing vulnerability to future shocks.

Vietnam's GDP growth is projected to remain resilient, at 7.2% in 2026 and 7% in 2027, supported by an increased public investment and accommodative monetary policy, though the external environment is expected to become more challenging and uncertain, he told the media.

"Inflation is projected to rise to 4% in 2026 before easing to 3.8% in 2027. However, I want to note that these projections remain subject to a high degree of uncertainty, given rapidly evolving global conditions," he added.

According ADB's Vietnam Economic Outlook for 2025-2026 report released at the event, although FDI and exports remain key drivers of growth, global headwinds - including the conflict in the Middle East and U.S. tariffs - may weigh on investment inflows and export performance.

Industrial growth will likely moderate to 7.7% in 2026, down from 9.2% in 2025. On the demand side, domestic consumption may suffer from weaker household spending and tighter bank credit.

Investment is expected to underpin economic growth in 2026. The government plans to accelerate public investment disbursements - estimated at about $38 billion - particularly for infrastructure, supporting construction activity.

However, FDI inflows may weaken amid slowing global investment and heightened uncertainty. Many investors are expanding existing operations rather than launching new projects.

In addition, the application of a global minimum corporate tax, together with infrastructure bottlenecks and administrative constraints, could add to slowing down new FDI registrations. Trade prospects in 2026 should soften amid moderating global demand.

Fiscal expansion and accommodative monetary policy may generate inflationary pressures through stronger domestic demand. Rising global oil prices could add further pressure.

Accelerated public investment, credit growth, anddong depreciation may also contribute to domestic cost pressures. Inflation will likely ease to 3.8% in 2027, as global commodity prices stabilize and domesticdemand pressures moderate.

The Vietnamese parliament approved a GDP target of at least 10% for 2026.

At a discussion at the National Assembly, the country's legislature, on Friday, Prime Minister Le Minh Hung, stated that growth must be accompanied by stability and control of major balances in supply-demand and finance. "Vietnam does not accept overheating growth and macroeconomic instability."

"The Government requires all levels and sectors to be unified in understanding, thinking, and action. This is a particularly important requirement to strive to achieve the goal," Hung said.

Earlier, on Thursday afternoon, reporting to the parliament on the implementation of the socio-economic development plan for the first months of 2026 and the five-year plan, Hung stated that this year, the country aims for double-digit growth. He stressed the government will mobilize and effectively utilize all resources to achieve this goal.

2025 was a strong year for Vietnam. Despite a challenging global environment, the economy expanded by 8.02%, matching the post-pandemic high recorded in 2022.

Growth was supported by expansionary policies, strong export performance ahead of the United States reciprocal tariff adjustments, and robust public investment. As a result, the country emerged as the fastest-growing economy in Southeast Asia.

The Vietnam Economic Outlook also highlights the importance of deepening Vietnam's corporate bond market to diversify financing sources and support long-term investment. Enhancing transparency, broadening market participation, and ensuring consistent regulations will be key to strengthening investor confidence and building a more resilient financial system.