Vietnam's economic growth decelerated in the first quarter, with rising energy costs amplifying uncertainty. Data released on Saturday by the General Statistics Office showed that first-quarter GDP increased by 7.83% year-on-year. This figure is lower than the previous quarter's growth of 8.46% but still surpasses the market's median expectation of 7.6%.
Manufacturing remained the primary driver of economic growth this quarter. Exports in March rose by approximately 20.1% compared to the same period last year, while the manufacturing sector expanded by 9.73% in the first quarter. Concurrently, the Consumer Price Index climbed 4.65% year-on-year in March. The Vietnamese government's target for this year is to keep inflation below 4.5%. The General Statistics Office noted in a statement that the global situation in the first quarter of 2026 remains complex and volatile, with escalating conflicts in the Middle East contributing to energy price fluctuations, supply chain disruptions, and rising inflation.
The ongoing Middle East conflict is impacting Vietnam's energy supply. As a manufacturing powerhouse heavily reliant on imported energy, Vietnam faces dual pressures from the conflict: rising fuel prices and supply constraints. To stabilize domestic fuel prices, the government has utilized its emergency energy reserve fund. Vietnamese airlines have also significantly reduced flights due to a shortage of jet fuel. To enhance energy security, Vietnam has suspended the collection of certain taxes on gasoline, diesel, and jet fuel until April 15. Simultaneously, the government is actively promoting a faster transition to electric vehicles and biofuels to reduce dependence on imported petroleum products.
Last week, State Bank of Vietnam Governor Nguyen Thi Hong stated on the central bank's website that Vietnam will not pursue short-term growth at the expense of macroeconomic stability. Prime Minister Pham Minh Chinh had previously warned that global tensions are exerting multiple pressures on inflation, interest rates, and energy supply, which could have a cascading effect on production capacity and business operations.
Despite the increasingly complex external environment, Vietnam's trade data remains robust. According to the General Statistics Office, Vietnam's trade surplus with the United States reached $33.9 billion in the first quarter, a 24.2% increase year-on-year. Last year, Vietnam was already the third-largest source of the US trade deficit, after China and Mexico. In January of this year, Vietnam's monthly trade surplus with the US temporarily surpassed that of both countries, ranking first. March exports grew by about 20.1% year-on-year, while first-quarter manufacturing growth hit 9.73%, continuing to serve as the main engine for the overall economy. Meanwhile, March imports surged by 27.8% year-on-year, indicating strong domestic demand and demand for production inputs.
To achieve its macroeconomic goal of sustaining 10% growth, the Vietnamese government is vigorously advancing its public investment plan, with hundreds of infrastructure projects underway simultaneously. Among these, the Long Thanh International Airport on the outskirts of Ho Chi Minh City is a key flagship project, which Prime Minister Pham Minh Chinh is pushing to become operational in the fourth quarter of this year.
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