Vietnam June 2026 Outlook – GDP Growth Remains Resilient Despite Global Uncertainty

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 June 2026.

Watch our video recap of key takeaways of the Vietnam Marcroeconomic and Stock market in June 2026

Vietnam’s Economy

• Vietnam’s Q2 2026 GDP grew 8.4%, beating expectations, as economic activity avoided the major disruptions initially feared when the Middle East conflict started. Active diplomacy secured alternative energy support from partner countries, while domestic measures — including the nationwide rollout of E10 gasoline — helped cushion the short-term impact. Industrial sector remained the key growth driver, expanding 10.5% y/y on robust manufacturing and construction activity, while services remained steady at 7.9%, in line with recent quarters, and agriculture grew a stable 3.9%. As a result, H1/2026 GDP growth came in at 8.2%. We are reviewing the results in detail and will provide a further update in our next presentation in the coming weeks.
• Inflation eased to 4.7%, driven by lower transportation costs, as gasoline and airfare prices fell by over 10% during the month on easing global energy prices. Even so, transportation costs remained up 5.3% y/y, still contributing to the overall increase in inflation. Housing & construction materials (18% of the CPI basket) rose 7.2%, reflecting solid demand for construction materials amid the ongoing infrastructure build-out, as well as higher electricity prices as consumption increased amid hot weather. Food and foodstuffs, roughly one-third of the CPI basket, rose 4.9% y/y, driven by eatingout services as restaurants continue to pass rising costs on to consumers.
• Retail sales growth accelerated to 12.9%, as supportive measures aimed at boosting consumption began showing some effectiveness on consumer confidence. International tourism remained a solid contributor, with Vietnam welcoming 12.2 million international visitors in the first six months, up 14.9% y/y. Adjusting for price effects, real retail sales growth was 7.3%.
• FDI disbursements reached $13.0bn, up 11.2%, reflecting a combination of structural advantages — location, a young and educated workforce — and deliberate government effort to keep Vietnam attractive to foreign manufacturers. The latest evidence: Vietnam and EFTA (Switzerland, Norway, Iceland, Liechtenstein) concluded FTA negotiations on July 2, bringing Vietnam’s FTA network to 18 agreements, among the most extensive in Southeast Asia. On the investment side, LG Innotek is expanding its semiconductor substrate manufacturing footprint with a new facility in Hai Phong, which will produce advanced chip substrates — key components connecting semiconductors to electronic devices and supporting higher-performance applications. The investment aligns with Politburo Resolution 10, issued last week, which calls for upgrading Vietnam’s FDI mindset from “attraction & cooperation” to “building national capability” — in other words, shifting focus from chasing investment quantity toward raising the localization rate and domestic valueadded content, upgrading the capabilities of domestic firms in the process.
• Public investment growth accelerated to 12.9%, with construction activity continuing at a high pace. One notable improvement has been the speed of land clearance and compensation — historically a major bottleneck — which has accelerated markedly thanks to eased procedures and betterstructured resettlement plans. The state budget surplus narrowed to $15.8bn from $19bn the prior month, pointing to optimism on faster disbursement progress. The government is also seeking approval to raise the budget deficit ceiling for the 2026-2030 period from 3% to 5% of GDP, signaling an ambitious investment agenda ahead.
• June PMI eased to 51.8 from 52.8 the prior month, though it remained in expansionary territory on continued growth in new orders and production. Inflationary pressure on both input and output costs eased over the month. The trade deficit widened to $16.5bn, driven largely by higher import costs for energy and semiconductor components, as concerns over global chip shortages and rising prices prompted companies to front-load purchases and build up inventory. We expect the deficit to narrow through the second half as these imported inputs flow through to shipped output, alongside typical seasonal export acceleration.
• USD/VND stayed flat year-to-date. Despite the trade deficit, the Vietnam Dong held steady, supported by continued strong FDI disbursement and a higher domestic interest rate environment. Foreign reserves rose by $4bn YTD to $87.6bn, which we believe partly reflects the crackdown on gold smuggling activity, effectively curbing errors & omissions outflows. While this remains below the IMF’s recommended three-month import cover, we view it as an encouraging sign that current policy is delivering solid early results.

Vietnam’s Stock Market

• The VN-Index edged up 0.3% in June, supported by selected heavyweight names, while broader market participation was muted. Sentiment improved in the second half of the month, helped by positive developments in the US-Iran negotiations and MSCI’s acknowledgement of Vietnam’s progress on capital market reforms. Nevertheless, investor behavior remained cautious, reflected in average daily trading volume falling to $761mn, down 24.4% m/m. Foreign investors stayed net sellers, with $582.9mn of outflows in June, bringing YTD net selling to $3.1bn.
• Financials (+1.7%) and Real Estate (+2.0%) sectors led the gain. The gain in Financials sector was driven by the renewed interest in banking stocks after the State Bank of Vietnam (SBV) allowed to increase the cap on short-term funding used for medium- and long-term lending from 30% to 40%, effective 1 July 2026, helping to ease the funding pressure for long-term deposits. The Real Estate sector’s gain (+2.0%) was concentrated in Vingroup related names, whose thin free float can amplify price moves, following the group’s selection as EPC contractor for five new metro lines in Hanoi, though execution and funding capacity remain to be seen.
• On the downside, the Energy sector (-13.7%) was the main laggard, as easing Middle East tensions brought oil prices back down, unwinding the earlier rally in oil-related names such as Petrovietnam Refinery (BSR, -18.8%) and Petrolimex (PLX, -9.9%).
• MSCI retained Vietnam’s Frontier Market classification in its 2026 review. This outcome was not a surprise, as the country is still working through several of MSCI’s accessibility criteria. Progress on the central clearing counterparty (CCP) mechanism, English-language disclosure, and account registration remains on track. MSCI also flagged foreign ownership limits as a continued bottleneck — an issue we believe the government is addressing through State divestment and IPO activity, which should gradually broaden the investable free float. With these developments progressing, we retain our view that Vietnam will be added to the MSCI EM watchlist in June 2027.
• We expect an earnings-driven market in the second half of the year. Many companies that have delivered strong earnings growth have barely performed, largely reflecting cautious sentiment amid global geopolitical uncertainty. With tensions now easing and recent macro data coming in stronger than expected, we expect sentiment to improve going forward. The upcoming Q2 earnings season, starting next month, should be strong and support share prices of fundamentally cheap, high-growth companies outside the index heavyweights, helping them catch up with underlying earnings momentum. The first tranche of FTSE Secondary Emerging Market inclusion schedule will start 3 months from now and that will be another factor supporting the market. At current levels, the top 100 stocks (ex-Vingroup related) trade at a 2026F P/E of 11.0x, offering an attractive entry point into Vietnam’s long-term growth story.

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