Vietnam December 2025 Outlook – Strong Growth Momentum and a Broadening Market Rally

We would like to present you our monthly Macroeconomic & Stock Market Highlights for Vietnam alongside with the monthly performance update of the TIM Vietnam Actively Managed Certificate for December 2025.

Watch our video recap of key takeaways of the Vietnam Marcroeconomic and Stock market in December 2025

Vietnam’s Economy

• Vietnam closed 2025 on a positive note, delivering GDP growth of 8.0%. Despite lingering concerns around U.S. tariff risks, exports and FDI disbursement remained resilient, while sustained public investment continued to support economic momentum. The year also marked an important phase of structural change, with government streamlining, provincial mergers, and a series of pro-growth regulatory measures being implemented. Internationally, Vietnam further expanded its international engagement through the establishment of five new Comprehensive Strategic Partnerships.
• Growth was led by Industrials and Services. The Industrials sector expanded by 8.9% y/y, supported by robust manufacturing activity. December PMI rose to 53, reflecting increases in output, new orders, and employment, which translated into strong trade flows, with exports and imports rising by 17.0% and 19.4% y/y, respectively. Construction activity also contributed meaningfully, driven by a 26% increase in state investment and improving real estate conditions. This momentum carried over into Services, which grew by 8.6% y/y, led by trade and transportation, with additional support from rising international tourist arrivals.
• Inflation remained contained, with December CPI increasing by 3.5%. Upward pressure came mainly from higher food and dining costs following the adoption of a new household business tax regime and adverse weather conditions, alongside rising prices of construction material amid strong infrastructure activity and higher rental costs. These pressures were partly offset by lower transportation costs due to declining gasoline prices.
• FDI disbursements reached USD 27.6bn, up 9.0% y/y, underscoring sustained investor confidence. Manufacturing accounted for 82.8% of total disbursements, with global manufacturers such as Intel, Foxconn, and Toyota announcing production expansion plans. Discussions with industrial park developers suggest foreign manufacturers are accelerating localization by shifting more production to Vietnam to mitigate potential U.S. transshipment tariffs, providing a solid foundation for manufacturing growth going forward.
• 2026 Outlook: We expect GDP growth of 8.0%. Vietnam is set to enter a new five-year leadership term in early 2026, which is expected to maintain a pro-growth policy orientation, with lower policy uncertainty and faster project execution. Infrastructure investment is poised to play a larger role, as 2026 marks the kick-off year for several large-scale projects across highways, railways, and the energy sector. Supported by a USD 9.5bn budget surplus and public debt at around 34% of GDP, Vietnam’s fiscal space is ample. In parallel, the government is seeking to mobilize an estimated 500 tons of domestically held gold back into the financial system through measures aimed at discouraging speculative hoarding.
• Government stimulus and continued growth in international tourism to support consumption. In 2025, retail sales grew by 9.2% y/y, underpinned by 21.2 million international arrivals (+20.4% y/y), the highest numbers ever, while domestic consumption has yet to show a broad-based improvement. Looking ahead, we forecast retail sales growth of 11.1% in 2026F, driven by stronger public investment disbursement, which should support job creation and lift household incomes. Recent increases in personal income tax deductions and adjustments to tax brackets are also expected to enhance disposable income and support consumer confidence. On the tourism front, Vietnam continues to relax visa policies, expand direct flight connectivity, and roll out targeted promotional campaigns to attract visitors. According to Agoda, based on searches conducted between September and November for stays in December 2025 and January 2026, family travel interest in Vietnam rose by 30% compared with the same period last year.
• The VND depreciated by 3.3% against the USD in 2025; however, we expect depreciation pressures to ease in 2026. One of the key reasons of VND’s weakness in 2025 was the maintenance of exceptionally low domestic interest rates. More recently, interest rates have begun to normalize, with commercial banks raising deposit rates by approximately 100 bps over the past three months across tenors, bringing the 12-month deposit rate to around 6%. We view this not as a shift toward monetary tightening, but as a healthy adjustment consistent with a growing economy. In parallel, authorities are accelerating capital market development to broaden funding channels beyond the banking system. We expect deposit rates to remain broadly stable at current levels, and, combined with the U.S. Federal Reserve’s continued rate-cutting cycle, these factors should provide support for the VND in 2026.

Vietnam’s Stock Market

• The VNIndex extended its upward trend in December, rising by 5.9% and bringing total returns for 2025 to 38.8%. Market sentiment was supported by resilient economic growth, Vietnam’s upgrade to FTSE Secondary Emerging Market status, and the resumption of IPO activities, which together lifted average daily trading value to USD 1.1 bn, up 31.2% y/y. That said, 69% of the index’s gains during the year were attributable to Vingroup related stocks, despite limited improvement in the group’s underlying business fundamentals.
• The rally in Vingroup-related stocks was initially driven by expectations surrounding Politburo’s Resolution 68, which underscores the role of the private sector in driving economic growth. This momentum strengthened after the group announced its intention to participate in the USD67bn North-South high-speed railway. Vingroup subsequently commenced construction of several other large scale infrastructure projects, including the Ben Thanh – Can Gio metro line and an LNG-fired power plant. As these capital-intensive projects advanced, funding needs increased materially, while leverage remained elevated at a debt-to-equity ratio of 2.0x as of Q3/2025. As a result, the group later announced its withdrawal from the proposed North-South high-speed railway. In addition, VIC’s free float remains highly concentrated, with 173 investors holding 92.4% of total voting rights (based on the latest EGM), while valuation remains steep at 9.1x 2026F P/B.
• The Financials sector also contributed meaningfully to the VNIndex’s performance, accounting for 23% of total gains, supported by solid year-to-date credit growth and continued improvements in asset quality. Together, Vingroup-related stocks and the Financials sector represented approximately 92% of the VNIndex’s total return, highlighting the narrow breadth of the market rally. Meanwhile, foreign investors remained net sellers, with total net outflows reaching USD5.2bn. Nearly half of these outflows were concentrated in a limited number of large-cap stocks, including VIC (USD0.9bn), VHM (USD0.4bn), and FPT (USD0.4bn), alongside ETF outflows of USD0.6bn.
• Looking ahead to 2026, we expect the market to become increasingly earnings-driven. In 2025, VNIndex performance was largely attributable to Vingroup and related stocks, despite delivering earnings growth of only 2.1% in 9M/2025. For 2026, we forecast earnings growth of 12.2% for the top 100 companies, while Vingroup-related companies are expected to contribute only around one-tenth of this growth. This divergence highlights opportunities in overlooked companies with stronger earnings momentum.
• In addition, the return of foreign investors, around the time the FTSE Emerging Market upgrade to be implemented in September 2026, should support market liquidity. Global asset managers such as J.P. Morgan and Vanguard have signaled deeper engagement with the Vietnam equity market, while progress toward MSCI Emerging Market inclusion and sovereign rating upgrades remains underway. Against this setting, we see infrastructure and FDI inflows, rising disposable income, and digitalization alongside capital-market upgrades as the key investment themes best positioned to benefit from Vietnam’s growth acceleration. For further details, please refer to our latest presentation.
• Overall, 2026 presents a favorable time for investors to initiate or increase exposure to the Vietnam equity market. An environment of declining global interest rates is supportive for emerging markets, while Vietnam is positioned to be among the fastest-growing emerging economies over the coming decade. The country is entering a phase reminiscent of China in the early 2000s, when large-scale infrastructure investment became a key driver of consumption growth, corporate earnings expansion, and long-term equity market performance.

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