OECD: Vietnam's economy continues to maintain recovery momentum in the 2026-2027 period

Photo caption — Vehicles loading and unloading goods at Vung Ang port. Photo: Huu Quyet/VNA

This is a positive signal showing that Vietnam's economy continues to maintain a solid macroeconomic foundation, even when the international trade context is uncertain.

OECD assessed that 2025 will see a strong “rebound” of the Vietnamese economy, with GDP in the third quarter of 2025 increasing by 8.2% compared to the same period last year. The main drivers continue to come from final consumption, fixed asset accumulation and exports of goods and services. The labor market remains positive with an unemployment rate of only 2.2% from the third quarter of 2024 - the lowest level ever recorded - while the labor participation rate continues to increase, reflecting a stable and expanding employment environment.

However, the OECD also noted that external demand is forecast to weaken in 2026, putting pressure on exports - one of Vietnam's growth pillars. As a highly open economy, Vietnam remains vulnerable to global policy fluctuations.

On the positive side, private consumption is expected to maintain stable purchasing power thanks to real wages and rising employment. However, the planned adjustment of value-added tax (VAT) in 2027 may cause consumption to slow down in the short term. Inflation is also forecast to increase due to solid domestic demand and one-off impact from VAT adjustment.

In return, the OECD believes that public investment – especially after the previous period of slow disbursement – will continue to be an important fulcrum supporting aggregate demand and promoting growth. The organization has raised its growth forecast for 2026 by 0.2 percentage points compared to the report released in June 2025.

Exports and FDI continue to be pillars

Despite the volatile global trade environment, Vietnam’s exports of goods and services have maintained a significant growth rate. In the first nine months of 2025, export turnover increased by 15.5%, higher than the 14.2% in the first half of this year. Exports to the US – a market accounting for about 30% of total turnover – increased sharply by 27.7%, amid the looming risk of import tariffs from the US.

Foreign direct investment (FDI) has maintained steady growth since mid-2023, further consolidating its role as an important driver of growth. This capital flow not only supplements investment resources but also promotes technology transfer and improves productivity of the economy.

Regarding fiscal policy, the OECD believes that in the coming time, boosting public investment will continue to create support, helping the economy move closer to the 8% growth target for 2025. However, the organization recommends that fiscal policy should gradually return to a neutral state in the medium term, especially when inflationary pressures increase.

The preferential policy of reducing VAT from 10% to 8% is expected to end at the end of 2026, while inflation is being affected by pension increases, minimum wage adjustments and public service price adjustments.

Regarding monetary policy, the Vietnamese Government 's stance remains supportive after interest rate cuts from June 2023. However, the OECD stressed that the State Bank needs to closely monitor inflation developments and be ready to make flexible adjustments if price pressures increase more strongly than expected.

Challenges arise

The OECD believes that Vietnam's growth prospects still face a number of risks, most notably the risk of weakening global trade from 2026. Private consumption, although important, may be temporarily affected by the VAT adjustment in 2027.

In addition, external risks – such as changes in major countries’ trade policies, the possibility of US transit tariffs and a tightening international investment environment – could all negatively impact exports and FDI.

To maintain long-term growth momentum, the OECD recommends that Vietnam should strengthen institutional reforms, especially in areas related to productivity and growth quality. Some important recommendations include: Completing the monetary policy framework in a market-based direction, helping to improve capital allocation and increase the resilience of the financial system; Continuing to open the service market, reducing entry barriers for foreign investors; Enhancing competition between private enterprises and state-owned enterprises through improving the business environment and ensuring a level playing field; Creating incentives to reduce the size of the informal labor force - currently accounting for about two-thirds of the workforce - to expand social security coverage and increase the overall productivity of the economy; Promoting enterprises to participate more deeply in the high-value ladder of the global supply chain.

Despite the expected slowdown in growth over the next two years, the OECD still rates Vietnam among the fastest-growing economies in Asia. This is in line with recent forecasts from many major international organizations. HSBC has raised its growth forecast for Vietnam in 2025 and 2026 to 7.9% and 6.7%, respectively, the highest in the Association of Southeast Asian Nations (ASEAN). UOB Bank forecasts 7.7% growth for 2025, while Standard Chartered forecasts 7.5% for 2025 and 7.2% for 2026.

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