Vietnam records 7.83% economic expansion in Q1

Vietnam posted 7.83% GDP growth in Q1/2026 from a year earlier, with the services sector accounting for 50.32% of the economy's total value added, according to the General Statistics Office (GSO).

The economy showed solid momentum in the period, supported by strong performances in industry, construction and services, which together accounted for the largest share of output.

The figure in Q1/2025 was 7.07%. The economy grew 8.02% in the whole 2025, while the parliament approved a GDP target of at least 10% for 2026.

In Q1/2026, the services sector was the biggest contributor to overall growth, making up more than 50.32% of the economy's total value added.

The GSO noted that robust consumer demand during the Lunar New Year holiday and a surge in international arrivals boosted trade and service activities, with the sector’s value added rising 8.18% year-on-year.

Industry and construction also maintained positive growth, with construction activity picking up on the back of accelerated public investment. The industry's value added rose 9.73%.

The agriculture, forestry and fisheries sector grew steadily, with value added rising 3.36% in the period.

In terms of economic structure, agriculture, forestry and fisheries accounted for 10.89% of GDP, industry and construction 37.15%, and services 43.45%, broadly unchanged from a year earlier.

Trade activity remained buoyant, with total import-export turnover reaching more than $249.5 billion, up 23% year-on-year. Exports rose 19.1%, while imports climbed 27%, resulting in a trade deficit of $3.64 billion.

In the first quarter, about 96,000 businesses were newly established or resumed operations, up 31.7% from a year earlier, equivalent to more than 32,000 firms per month.

However, business closures also increased strongly, with an average of 30,600 firms exiting the market each month.

Total additional registered capital in the economy reached over VND1,300 trillion ($49.35 billion), down 5.1% year-on-year.

A business sentiment survey in the processing and manufacturing sector showed that 23.8% of firms reported improved conditions compared to Q4/2025, while more than 40% said operations remained stable and the rest faced difficulties.

Consumer prices rose 3.51% in the first three months from a year earlier, with March recording the highest increase for the month in five years.

Nguyen Thi Huong, head of the GSO under the Ministry of Finance, described the growth as “positive” amid global uncertainties and escalating geopolitical tensions.

“Macroeconomic stability has been maintained and inflation kept under control at a reasonable level,” she said.

Still, Vietnam’s economy faces headwinds in the coming quarters due to its high openness and exposure to global economic and political fluctuations.

To achieve a double-digit growth target this year, the GSO said Vietnam needs to maintain macroeconomic stability, ensure major economic balances, secure supply, and manage prices.

Authorities should also update growth and inflation scenarios in a timely manner and strengthen economic resilience to external shocks, Huong added.

She also called for flexible management of fuel prices through tax, fee and stabilization tools to contain domestic price increases, while carefully timing adjustments to state-administered prices such as electricity, healthcare, education, and public services to avoid adding inflationary pressure.

In addition, policymakers should provide targeted support for sectors most affected by rising fuel and logistics costs, including transport, fisheries, agriculture and logistics, and consider tax and fee relief measures to help businesses stabilize operations and preserve jobs.

According to S&P Global, the Middle East war caused a marked acceleration in the Vietnamese manufacturing sector's rate of input cost inflation during March, with selling prices subsequently raised at the fastest pace in almost 15 years.

Intensifying price pressures acted to limit demand, and rates of growth in both new orders and output slowed as a result. In turn, employment and purchasing activity were scaled back, the company wrote in a release on Wednesday.

Meanwhile, suppliers' delivery times lengthened substantially. The impacts of the war also resulted in weaker business confidence, with optimism easing to a six-month low, according to the release.

The S&P Global Vietnam Manufacturing Purchasing Managers' Index (PMI) remained above the 50.0 no-change mark in March, extending the current sequence of improving business conditions to nine months.

The PMI dropped to 51.2 from February's 54.3 and pointed to the least marked strengthening of operating conditions since last September. A key feature of the March PMI survey was the impact of the war in the Middle East on inflation.