Vietnam May 2026 Outlook – Economic Growth Remains Robust as FDI and Infrastructure Investment Accelerate

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 May 2026.

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

Vietnam’s Economy

• Vietnam started May with a meaningful signal from one of the world’s toughest credit rating agencies. On May 4, Moody’s revised Vietnam’s sovereign outlook from “stable” to “positive” while affirming its Ba2 credit rating, citing the country’s solid growth fundamentals, strong external buffers, and continued institutional reforms. Moody’s has historically been the most conservative of the three major rating agencies on Vietnam, making this outlook revision particularly meaningful. This upgrade did not happen in isolation. It came alongside Vietnam’s recent FTSE Russell Secondary Emerging Market upgrade — two independent, globally recognized validators pointing in the same direction.
• Vietnam’s new leadership has maintained a remarkable pace of economic diplomacy, reinforcing the country’s increasingly outward looking and pro-growth policy direction. In May alone, General Secretary and State President To Lam carried out several high-profile overseas engagements, including visits to India and Thailand, as well as his attendance at the Shangri-La Dialogue in Singapore. The India visit emphasized cooperation in strategic areas such as AI, semiconductors, defence, and critical minerals, while his speech at the Shangri-La Dialogue reaffirmed Vietnam’s consistent foreign policy of promoting peace, cooperation, dialogue, and consultation. Taken together, these activities send a clear message that Vietnam is seeking to deepen economic and strategic partnerships, strengthen its voice in regional affairs, and position itself as a balanced and reliable partner in an increasingly fragmented geopolitical environment.
• FDI disbursements reached USD9.8bn, up 9.6% y/y, with manufacturing remaining the dominant sector and accounting for 82.7% of total disbursed capital. This continues to reflect the deepening of Vietnam’s role as a global manufacturing hub. A notable highlight in May was Samsung Electronics’ announced plan to invest USD1.5bn in its first chip-testing plant in Vietnam, located in Thai Nguyen and expected to begin operations in 2027. The project adds to Samsung’s existing USD23.2bn cumulative investment in the country, further strengthening Vietnam’s position as a regional back-end semiconductor hub.
• Robust retail sales posted 11.2% growth. Vietnam welcomed 10.6mn international visitors in the first five months, up 14.9% y/y, with visitors from Asia continuing to play a key role and accounting for 78% of the total. Supported by a budget surplus of USD19bn, the government also maintained fiscal measures to support domestic consumption. The most notable measure in May was the fivefold increase in the tax threshold for annual rental income, from USD4,000 to USD20,000.
• Inflation was 5.6%, a slight increase vs. last month. Housing and construction materials, which account for 18% of the CPI basket, increased by 6.6% y/y, reflecting persistently high domestic gas prices and solid demand for construction materials amid the ongoing infrastructure build-out. Food and foodstuff, which make up around one-third of the CPI basket, rose by 4.8% y/y, mainly driven by eating-out services as higher input costs, particularly gas and raw materials, continued to pass through to food service prices. Transportation costs also increased by 5.22% y/y, reflecting persistently high gasoline prices. This month, the government mandated a nationwide shift from ethanol-free and E5 gasoline to E10 blended gasoline, a policy that should modestly lower fuel costs at the pump and ease price pressures over the coming months. Looking ahead, supported by a strong budget surplus, we believe the government has room to provide subsidies and keep inflation contained around the current level toward year-end.
• Public investment increased by 11.2% y/y, with infrastructure projects remaining the primary driver. Construction activities are visibly on the street of Vietnam, and they are also reflected in the consumption of key construction materials. In fact, volume consumption of steel and cement rose by 19.0% and 16.0% respectively.
• May PMI rose to 52.8 from 50.5, supported by increases in new orders and purchasing activity, although rising input prices remained a concern for manufacturers. The trade balance recorded a deficit of USD13.8bn, mainly as imports outpaced exports. Beyond higher imports of petroleum products, a notable point was the widening trade deficit with South Korea, which expanded 72.5% y/y to USD21.1bn, driven by electronics components and semiconductor inputs. This mirrors a pattern in which Korean upstream suppliers increase shipments ahead of a downstream production ramp-up. As a result, we expect exports to accelerate in the second half and help to conclude the year with a surplus of $4bn. Despite the trade deficit, the USD/VND exchange rate has remained broadly flat year-to-date, supported by a relatively stable US Dollar Index (DXY) and more competitive VND bank deposit rates.

Vietnam’s Stock Market

• The VN-Index edged up 0.9% in May, supported mainly by a rally in large State-owned enterprises (SOEs), amid expectations of potential State divestment after several companies were classified as “not qualified” as public companies due to their concentrated shareholder structures. In May, the government also held meetings with 23 major SOEs, during which a draft roadmap for divestment and privatization was discussed. While we believe State divestment will gradually take place, as the government needs additional capital to finance its ambitious growth agenda, the process is likely to take time. As such, we view the recent rally in these SOE-related names as largely short-term in nature. In the broader market, despite resilient macro picture, sentiment remained cautious as global uncertainties persisted. Average daily trading value was broadly unchanged vs. last month at USD1.0bn, while foreign investors continued to reduce exposure, with net selling of USD746mn during the month.
• In terms of sector performance, Financials led the market, accounting for 69% of the VN-Index’s monthly gain. State-owned commercial banks, namely Vietcombank (VCB) and BIDV (BID), were the main contributors. Other sectors with heavy-weight SOE names, such as Energy and Utilities, also recorded sizeable gains of 18.1% and 9.7%, respectively.
• On the other side, Industrials sector (-2.3%) was the main laggard, dragged down by airline stocks amid concerns over higher jet-fuel prices. Information Technology also declined by 3.7%, largely due to FPT (-3.7%), as investors remained concerned about the long-term implications of rapid advancements in AI and their potential impact on FPT’s software outsourcing business. As discussed in previous factsheets, we believe these concerns are overstated, as AI has been helping FPT improve productivity and strengthen its ability to secure new orders. In fact, FPT’s total signed international contracts increased by 30% y/y in the first four months of 2026.
• We remain optimistic on the market, although recent share price performance has diverged from underlying fundamentals. Companies delivering solid earnings growth have barely moved, while the index’s gains have remained concentrated in a few heavy-weight names. Looking ahead, we expect institutional capital following Vietnam’s upcoming inclusion in the FTSE Secondary Emerging Market Index to help unlock the fair value. At the same time, upcoming IPOs and potential State divestment should broaden the investment universe and reduce the current dominance of selected heavy-weight names. In parallel, market infrastructure upgrades, including the central clearing counterparty (CCP) mechanism and bilingual disclosure requirements for public companies, remain on track. These developments should further support Vietnam’s case for inclusion in the MSCI Emerging Market watchlist, which we expect in June 2027. At current levels, the VN-Index excluding Vingroup-related stocks is trading at a 2026F P/E of 10.2x, well below the regional peers’ average of ~14.0x, reinforcing Vietnam’s appeal as a compelling long-term growth market.

Invest with us:

Please download the May 2026 Factsheet for our TIM Vietnam Actively Managed Certificate.

You can find more information about our services and feel free to get in touch with us at your convenience