ADB upgrades Vietnam’s 2026 growth to 7.8%, highest in ASEAN

VIETNAM, 24 SEPTEMBER 2026 —

The Asian Development Bank has raised Vietnam’s 2026 GDP growth forecast to 7.8%, up from 7.2% in July, the highest in ASEAN and the largest upward revision in the region.

The revision reflects Vietnam’s outperformance relative to its regional peers, with its 2026 growth now 3.1 percentage points above the ASEAN average, according to the ADB’s Asian Development Outlook 2026 Supplement. The bank attributed the upgrade to robust industrial activity, with manufacturing set to expand 9% in 2026—supported by a purchasing managers’ index (PMI) rising from 52.9 in July to 53.3 in August, indicating continued expansion in output and new orders.

Domestic demand and investment remain key drivers, though consumption growth has lagged behind investment, suggesting an investment-led expansion fueled by public spending, FDI, and private infrastructure projects. However, the ADB warned that rapid credit growth—bank lending now stands at 145% of GDP—could amplify financial risks, including liquidity strains and credit concentration in sectors like construction.

While trade resilience is expected in the second half, a widening trade deficit poses risks to net exports and exchange-rate stability. Export growth faces headwinds from slower U.S. demand, trade policy uncertainty, and potential supply-chain disruptions, the bank noted. Inflation is projected at 4.3% in 2026, up from 4.0% in July, as domestic demand and import costs exert upward pressure, though it is expected to ease to 4.0% in 2027.

The ADB’s outlook contrasts with regional trends, where developing Asia’s growth is forecast to slow from 5.5% in 2025 to 5.0% this year, before edging up to 5.1% in 2027. Southeast Asia’s growth projections were revised slightly higher to 4.7% in 2026 and 4.9% in 2027, driven by Vietnam’s performance and stronger public investment in India.

Risks to Vietnam’s outlook include geopolitical tensions, El Niño-related energy shocks, and financial vulnerabilities from credit expansion. The ADB urged Vietnam to prioritize macroeconomic stability, inflation control, and structural reforms to sustain high-quality growth.

For Malaysian businesses, Vietnam’s growth trajectory presents both opportunities and competitive pressures, particularly in trade and manufacturing supply chains where Vietnamese firms are expanding capacity. The ADB’s warning on financial vulnerabilities also underscores broader regional risks for cross-border investors.

Separately, Singapore’s UOB raised its 2026 GDP forecast for Vietnam to 8.5%, citing continued momentum in domestic demand and FDI inflows into manufacturing and infrastructure. The bank’s outlook suggests Vietnam’s economic dynamism will persist, though policymakers must balance growth with financial stability to avoid overheating risks.

Related: Asian Development Bank · Masato Kanda · Vietnam