Vietnam March 2026 Outlook – Strong GDP, Higher Inflation, and FTSE Upgrade

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 March 2026.

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

Vietnam’s Economy

• Tensions in the Middle East have dominated global media coverage, with Asia emerging as one of the most exposed regions—Vietnam included. While the country is able to self-supply roughly 20% of its crude oil needs and has accelerated a range of energy security measures. Authorities are working to maximize domestic oil and gas output, prioritize fuel supply for the local market, and temporarily reduce taxes on petroleum products to ease price pressures across the economy. At the same time, Vietnam is actively diversifying supply sources, including new energy agreements with Russia, while additional fuel support from China has also been recorded in recent days. In the power sector, the immediate impact remains limited, as imported LNG accounts for only around 2% of total electricity generation capacity. On a positive note, Iranian authorities are implementing procedures to facilitate the transit of Vietnamese vessels, including oil tankers, through the Strait of Hormuz, which could help ease near-term supply pressures. This development underscores Vietnam’s active foreign policy approach and highlights the benefits of its neutral positioning.
• Vietnam reported Q1/2025 GDP growth of 7.8%, driven by robust performance of industrials and services sectors. Strong manufacturing and construction activities are the main support for the industrials sector, which grew by 8.9% y/y. This robust industrial performance also supported services growth, which rose 8.2% y/y, with trade and transportation among the main beneficiaries, alongside a steady increase in retail sales that provided additional support to overall service activity. Overall, the impact of the U.S.–Iran conflict has yet material impact the Q1 GDP results, though some deceleration may emerge in Q2 as the effects begin to gradually filter through the economy.
• Inflation rose to 4.6% mainly driven by transportation price. Due to the increase in global oil price, transportation cost, which account for nearly 10% of the CPI basket, jumped by 10.8% y/y. Housing and construction materials also increased by 5.9% y/y, reflecting both the spillover from higher energy prices and elevated commodity prices driven by geopolitical uncertainties. Looking ahead, inflationary pressure is expected to persist. Damage to oil production infrastructure in the Middle East, from which Vietnam imports a large share of its crude oil, may take several months to repair. Assuming the Strait of Hormuz reopens by end-April, we expect Vietnam’s CPI to remain around current levels through year-end.
• Retail sales accelerated in March, lifting Q1 growth to 10.9%. Vietnam welcomed 6.7 million international visitors in the first quarter, up 12.4% y/y, although higher airfares appear to have weighed on travel demand, with March arrivals increasing by only 1.3% y/y. On a more positive note, domestic consumption showed signs of improvement after a relatively soft start to the year. Excluding price effects, retail sales still recorded real growth of 7.0% in Q1, in line with 2025 levels. Looking ahead, growth may moderate amid rising inflation and softer support from international tourism.
• FDI disbursements reached $5.4 billion, increased by 9.1% y/y. A key development in March was the approval of the Lien Chieu deep seaport project in Da Nang city, with the winning bidder being a consortium comprising Hateco Group JSC and APM Terminals B.V. (Netherlands). The project has a total investment value of $1.76bn.
• Public investment increased by 12.1% y/y, with infrastructure projects remaining the primary driver. Construction activity across major projects continued, although progress has moderated compared to earlier periods, reflecting rising input costs and higher prices of key construction materials. Vietnam will finalize key leadership positions in the next few days.
• March PMI declined to 51.2 from 54.3 in the previous month, extending the current sequence of improving business conditions to nine months. That said, businesses in the survey reported sharp rise in input costs and longer suppliers’ delivery time. Output and new orders still reported increases, though the growth eased mildly. This expansionary PMI was reflected in Q1 trade activity, with exports and imports rising by 19.1% and 27.0% y/y, respectively. However, stronger import growth resulted in a trade deficit of USD 3.6 billion, which we attribute to inventory restocking demand and precautionary purchases of raw materials amid concerns that geopolitical uncertainties could drive input costs higher.
• Vietnam has finalized key leadership appointments, with To Lam assuming both the roles of General Secretary and President, while Le Minh Hung has been appointed Prime Minister, and the Chairman of the National Assembly continues into a new term. While the consolidation of the General Secretary and President roles has raised questions about a potential shift away from collective leadership, the practical impact is likely limited, as the President’s role remains largely diplomatic with minimal involvement in economic policymaking. Importantly, the broader leadership structure remains intact. The presence of Tran Cam Tu as Standing Member of the Secretariat helps preserve the functional balance of the traditional “four pillars,” suggesting continuity in policymaking and execution. With this election outcome, we believe the focus of the new term will shift toward policy implementation.

Vietnam’s Stock Market

• The VN-Index declined 10.9% in March, reversing earlier gains as global uncertainties resurfaced and triggered a broad-based risk-off sentiment. The market came under pressure early amid escalating US-Iran tensions, which raised concerns over lower economic growth, higher inflation. At the same time, rising bank deposit rates reduced the relative attractiveness of equities, contributing to more cautious investor positioning. Average trading volume maintained at approximately $1.2bn, flat compared with the first two months. On the international front, foreign investors recorded net outflows of $667mn in March ($1.2bn YTD), as global funds reduced exposure to emerging and frontier markets amid heightened risk aversion and a stronger US dollar. Notably, YTD net selling was concentrated in Vingroup-related stocks (~$576mn) and FPT (~$362mn).
• The sell-off was broad-based, in which the two largest sectors by market cap are Financials and Real Estate declined by 10.3% and 16.1% respectively. In the Financials sector, rising interest rates raised concerns over higher non-performing loans. Meanwhile, the decline in the Real Estate sector was largely driven by a sharp correction in Vingroup JSC (VIC; -22.4%). Given its relatively limited free float, the stock tends to exhibit heightened volatility, particularly in response to large selling pressure, including foreign outflows. In addition, investor sentiment toward the sector weakened amid high mortgage rates to impact property demand.
• Meanwhile, the Information Technology sector dropped by 19.6%, driven largely by declines in FPT Corporation (FPT, -20.5%). The stock experienced sustained foreign selling throughout the month, reflecting both broader fund outflows and growing concerns over the long-term implications of rapid advancements in AI capabilities. Investors have become more cautious despite the company’s solid operational performance and proactive transition toward higher-value services, supporting long-term growth. We think the concern is overstated as AI can help FPT to improve efficiency and receives more order. In fact, total amount of new signed contract of FPT increased by 21% y/y in the first two months of the year. The stock is trading at attractive 2026 forward P/E of 12.2x and PEG of 0.7x. Weaknesses were also observed across other cyclical sectors, including Energy (-17.1%), Utilities (-20.0%), and Materials (-11.7%).
• FTSE Russell officially announced Vietnam’s upgrade to Secondary Emerging Market status on April 7, 2026. As a reminder, the market had been provisionally upgraded in September last year, subject to the interim review in March 2026. The confirmation reflects continued improvements in market infrastructure, including the introduction of a mechanism allowing foreign institutional investors to route orders to local brokers via global brokers without the need to open domestic trading accounts. Following this development, we expect foreign investor participation to pick up around September, when the upgrade becomes effective, with estimated inflows of approximately $3bn to be disbursed in phases.
• Looking ahead, the stock market is expected to remain sensitive to international developments, although volatility may moderate as many investors have already deleveraged. That said, sentiment could shift quickly as the news evolve. The VN-Index is currently trading at a 2026F P/E of 11.9x, based on earnings forecasts that largely reflect pre-conflict assumptions. However, that valuation is 20% below Southeast Asian peers, suggesting some risks have been priced in. With the upcoming AGM season, investors are likely to gain clearer insights into the impact of the conflict on corporate performance, which could help reinforce confidence. In addition, the FTSE Russell upgrade to Secondary Emerging Market status is expected to provide a supportive backdrop for investor sentiment.

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

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