The World Bank’s Viet Nam Economic Update – May 2026 shows that Viet Nam entered 2026 with a positive growth foundation. GDP grew by 8% in 2025, the highest rate in ASEAN, and the economy continued to expand by 7.8% year-on-year in the first quarter of 2026, supported by exports, investment, foreign direct investment, domestic consumption, services, and public investment.
However, the more important message is not only about growth numbers. A closer reading of the report suggests that Viet Nam remains a market of significant opportunity, but opportunities are becoming more selective. Overall growth remains positive, but the extent to which different businesses benefit from that growth will increasingly vary.
In previous periods, many businesses could grow on the back of market expansion, competitive costs, favorable credit conditions, or rising export orders. In the new environment, however, global trade uncertainty, energy price volatility, exchange rate pressure, and more cautious capital flows are making differences between companies more visible.
Companies with a stronger position in the value chain, sound governance, transparent financials, stable customers, and the ability to work with external partners will have an advantage. By contrast, businesses that rely too heavily on a few customers, a few markets, short-term borrowing, or collateral-based financing may become more vulnerable when conditions change.
High growth, but growth quality matters more
Viet Nam remains one of the most dynamic economies in the region. Manufacturing, exports, foreign investment, tourism, and public investment continue to be key growth drivers. In particular, Viet Nam is benefiting from rising investment in technology, electronics, and artificial intelligence-related products. The share of AI-related goods exports rose from around 20% of GDP in 2023 to about 32% of GDP in 2025, placing Viet Nam among the highest globally. The manufacturing sector grew by 9.6% in 2025 and 9.5% in the first quarter of 2026, contributing around one-third of overall GDP growth.
These numbers show that Viet Nam continues to play an important role in regional production chains. But the deeper question is how much value is retained domestically, how Vietnamese businesses participate in these value chains, and whether export growth is translating into stronger internal capabilities for domestic firms.
An economy can grow rapidly through exports and foreign investment, but if linkages with domestic firms remain weak, the spillover effects will be limited. In that case, positive macroeconomic growth does not necessarily mean that most domestic businesses are becoming stronger at the same pace.
This is something business owners and management teams should watch closely: is the company merely benefiting from the general growth environment, and is it truly improving its position in the value chain?
Foreign investment remains strong, but domestic linkages are still weak
One of the report’s key highlights is the continued strength of foreign direct investment. In 2025, total registered FDI reached USD 38.4 billion, while disbursed FDI reached a record USD 27.6 billion. In the first quarter of 2026, registered FDI rose by 36% year-on-year to USD 15.2 billion, with manufacturing remaining the dominant sector, accounting for 61% of newly registered capital.
However, strong foreign investment does not automatically lead to a stronger domestic business sector. The report describes this as a “dual economy”: foreign-invested firms and firms linked to global value chains account for only about 5% of all firms, but generate around half of value added and employment, and 73% of exports. Meanwhile, the domestic business sector remains fragmented and low in productivity, with 98% of firms being small or informal and only 17% participating in exports.
This divide shows that Viet Nam does not lack growth momentum, but it still lacks strong enough bridges between the high-growth sector and the domestic business sector. Unless domestic firms improve governance, product quality, operating standards, and the ability to meet the requirements of larger partners, they will struggle to participate more deeply in the value chains now moving into Viet Nam.
At the company level, this raises a practical question: where does the business stand in the value chain? Is it selling products, production capacity, market access, customer relationships, or is it mainly competing on price?
The answer to that question will determine whether a company can become a valuable partner in the next phase of growth.
Capital pressure is revealing business quality
The report also shows that the capital environment is becoming more cautious. Viet Nam’s credit-to-GDP ratio has reached around 145%, the highest in ASEAN and among the highest in lower-middle-income economies. Real estate accounts for about one-quarter of total outstanding credit, while the banking system is facing liquidity pressure as credit growth outpaces deposit growth.
This does not mean businesses will no longer be able to borrow. But it does suggest that the period of easier capital may be gradually passing. As banks tighten risk management, businesses will find it harder to rely solely on collateral or lending relationships as they did before.
In this environment, the financial quality of a business will matter more. Companies with clear cash flow, transparent financial statements, a reasonable debt structure, stable margins, and a convincing growth strategy will have an advantage when accessing capital or working with partners.
By contrast, companies with rising revenue but weak cash flow, unstable profits, excessive short-term debt, or unclear financial data will face more difficulties. This is not only a financial issue. It reflects the level of readiness of a business in a more competitive and selective environment.
Capital markets are opening, but standards are rising
Another positive signal is the development of Viet Nam’s capital markets. FTSE Russell’s announcement to upgrade Viet Nam from Frontier Market to Secondary Emerging Market status is expected to attract an additional USD 3–5 billion in investment inflows in the first three years after the upgrade takes effect. The corporate bond market is also gradually recovering, especially among banks and real estate firms, showing the role of bonds as an important medium- and long-term funding channel for large companies.
But capital markets are not open equally to all companies. As transparency, disclosure, and corporate governance standards become more important, only businesses with sufficiently strong foundations will be able to access long-term capital effectively.
The same applies to finding investors, strategic partners, or pursuing mergers and acquisitions. External parties do not look only at revenue or assets. They look at the quality of growth, cash generation, legal risks, governance systems, management teams, market position, and the company’s ability to continue growing after receiving new resources.
Therefore, the real question is not simply “Does the company need capital?” The more important question is: “Is the company credible enough to receive capital?”
More partnership opportunities, but not every partnership creates value
As Viet Nam continues to attract foreign investment, accelerate infrastructure development, deepen capital markets, and integrate further into regional supply chains, the need for business partnerships will increase.
Foreign companies may need local partners to understand the market, develop distribution channels, build production capacity, or expand their presence in Viet Nam. Domestic companies may need partners to upgrade technology, expand markets, improve governance, or prepare for the next stage of development.
However, a partnership creates value only when both sides are genuinely aligned. A good partner does not only bring capital. They may also bring markets, technology, customers, management capability, supply chains, brand strength, or international expansion opportunities. On the other hand, the wrong partner can create conflicts over control, growth direction, governance culture, or the use of cash flow.
Therefore, the key is not to connect with as many parties as possible. The key is to understand what the business needs, what it has, what it lacks, and who it should go with.
Implications for business owners and management teams
The report suggests that the next phase will not only be a race for scale, but also a race for stronger business foundations. For business owners and management teams, the important task is not only to follow macroeconomic indicators, but to translate them into specific questions for their own companies.
Is the company growing because of its core capabilities, or mainly because of favorable market conditions? Is cash flow keeping pace with revenue? Is the governance system keeping up with business scale? Is the company overly dependent on one customer, one sector, one market, or one source of funding? If an external partner shows interest, can the company clearly explain where its value lies?
These questions are not only for companies preparing to sell shares, find investors, or seek strategic partners. They are strategic questions for any business that wants to go further in a growing but increasingly differentiated environment.
The best time to prepare is usually not when the company is short of capital or under cash flow pressure. The best time is when the company still has options, still has room to grow, and still has enough negotiating position to decide who it wants to go with, how it wants to move forward, and what it wants to preserve for the future.
The World Bank’s report shows that Viet Nam remains an economy of significant opportunity. But in the next phase, macroeconomic growth will not automatically translate into success at the company level. Opportunities will belong to businesses with clearer positioning, stronger governance foundations, more transparent financials, and a more professional ability to work with external partners.
EPS Investing
Strengthening Businesses. Unlocking Capital.
Reference: Viet Nam Economic Update – May 2026, World Bank.
Is your business prepared to adapt to the new environment?
In a growth environment that is becoming increasingly selective, businesses need more than scale expansion. They also need to strengthen their governance foundation, financial structure, cash flow, and strategic positioning.
EPS Investing works with business owners and management teams to review their business model, assess financial structure, strengthen internal readiness, and develop suitable options for key strategic decisions such as finding partners, receiving capital, mergers and acquisitions, or preparing for a new stage of growth.
With more than 25 years of experience in finance, investment, corporate management, and the Vietnamese market, EPS helps businesses become better prepared before entering important transactions.