Vietnam’s trade deficit widens to $12.7 billion in first five months of 2026
Vietnam’s trade deficit widened to $12.7 billion in the first five months of 2026, the largest shortfall in nearly three decades, as imports surged 33.8% while exports grew 18% in May.
Source: VietnamNet · July 21, 2026 at 6:23 PM · AI-assisted report
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VIETNAM, 22 JULY 2026 —
Vietnam’s trade deficit widened to $12.7 billion in the first five months of 2026, the largest shortfall in nearly three decades, as imports surged 33.8% while exports grew 18% in May.
The gap compares with a surplus of about $5 billion in the same period of 2025, UOB Global Economics and Markets Research said. Imports of machinery and equipment for infrastructure projects and higher energy prices have driven the imbalance, according to the bank.
Manufacturing activity showed signs of cooling despite a pickup in May. The S&P Global Vietnam Manufacturing Purchasing Managers’ Index rose to 52.8 from 50.5 in April, but industrial production growth eased to 9% from 10% the previous month. Average growth in the second quarter reached 9.5%, down from 11% in the first quarter.
Inflation remains a key concern. The consumer price index climbed 5.6% year-on-year in May, the highest in six years and the third consecutive monthly increase. Average inflation for the first five months stood at 4.3%, near the government’s 4.5% target. The full-year projection has been raised to as high as 5.5%.
The State Bank of Vietnam has responded with a mix of policy measures. It kept benchmark rates unchanged to balance inflation control with exchange-rate stability, while urging banks to lower lending rates to support businesses. Fiscal steps include extending a 0% tax rate on petrol and selected fuels through the end of June.
Improving US-China relations following talks between President Donald Trump and President Xi Jinping in mid-May could ease trade tensions and reinforce Vietnam’s role in global supply-chain shifts, UOB noted. The bank expects the Vietnamese dong to depreciate gradually, forecasting the USD/VND rate at 26,500 in the third quarter of 2026, softening to 26,100 by the second quarter of 2027.
Despite near-term pressures, UOB maintains its 2026 GDP growth forecast at 7%, with a moderation to about 6.7% in the second and third quarters. The bank expects Vietnam to retain solid fundamentals supported by foreign direct investment and consistent macroeconomic policies.
Vietnam aims to reach upper-middle-income status by 2030, lift per capita GDP to roughly $8,500, and rank among the world’s 30 largest economies, UOB said. A potential upgrade to emerging-market status in September 2026 could further bolster capital inflows.
Related: UOB · State Bank of Vietnam (SBV) · Donald Trump · Vietnam
Malaysia Impact
The growth of Vietnam's economy is likely to have a positive impact on the Malaysian economy, given the close trade and investment ties between the two countries. Malaysia may benefit from Vietnam's continued growth and economic integration into the regional and global economy.