Vietnam’s economy continues to grow strongly, but faster imports, exchange-rate pressure and volatile banking-system liquidity are making the financial environment less predictable for investors and business leaders.

Vietnam’s economy continues to maintain strong growth momentum. Industrial production, exports, consumption and credit are still expanding. The most important development is that the financial pressure behind that growth is becoming more visible.

Imports are growing faster than exports, increasing demand for US dollars and placing pressure on the exchange rate. When the currency comes under pressure, the ability to inject additional Vietnamese-dong liquidity into the banking system becomes more constrained. Credit may therefore continue to grow while the cost, availability and refinancing conditions of capital become less stable.

This does not mean that Vietnam’s economic growth is slowing. It means that the economy is entering a more complex phase in which high growth must be financed under tighter monetary and foreign-exchange constraints.

The question is therefore not only how quickly the economy can continue to expand. The more important issue is what financial pressures that expansion is creating, how effectively the system can absorb them and how they may influence investment and corporate decisions.

Faster imports are changing the composition of growth

In July 2026, exports increased by 23.7% year on year on a three-month moving-average basis. This was a strong result, indicating that production and external demand remained resilient.

Imports, however, rose by approximately 41% on the same basis, considerably faster than exports. During the first seven months of the year, exports increased by 21.7%, while imports rose by 34.8%. As a result, the trade balance shifted from a surplus of US$10.35 billion during the same period of 2025 to a deficit of US$20.52 billion.

Rapid import growth is not necessarily a negative signal. In an economy centred on manufacturing and exports, businesses often need to import machinery, equipment, components and materials before additional capacity, production and revenue can be generated.

The composition of imports also shows that most incoming goods are being used for production. Capital goods and production inputs accounted for 94.1% of total imports during the first seven months. Imports of electronics, computers and components alone reached US$135.8 billion, an increase of 65.9% year on year.

Higher imports may therefore indicate the beginning of a new production and investment cycle. But the wide gap between import and export growth also shows that economic expansion is requiring an increasing volume of external inputs.

This changes the financial quality of growth. Output and revenue may rise, but the amount of foreign currency, working capital and credit required to generate each additional unit of growth may also increase.

If this pattern continues, the pressure will extend beyond the trade balance. It will affect demand for US dollars, the exchange rate, import costs, inventory requirements and the ability of businesses to convert growth into cash.

Exchange-rate pressure is narrowing monetary-policy space

Faster import growth means that businesses need more foreign currency for settlement. This pressure is emerging while US-dollar assets continue to offer attractive returns and foreign investors remain net sellers in Vietnam’s equity market.

Foreign investors sold approximately VND11.6 trillion of Vietnamese equities in July. Cumulative net foreign sales during the first seven months reached around VND92 trillion, equivalent to approximately US$3.54 billion.

Portfolio flows should be distinguished from long-term foreign direct investment. Net equity sales do not mean that the entire amount was immediately transferred out of Vietnam. Nevertheless, persistent selling can affect market sentiment, asset liquidity and demand for foreign currency.

The more important issue is the policy trade-off created by exchange-rate pressure.

When liquidity in the banking system tightens, the State Bank of Vietnam can inject Vietnamese dong through open-market operations. This can ease interbank rates and support the supply of credit to the economy.

But if large liquidity injections continue while demand for US dollars remains elevated, depreciation pressure may intensify. The central bank must therefore balance growth support and banking-system liquidity against inflation control and exchange-rate stability.

The room for supporting the economy depends not only on the desired direction of monetary policy. It also depends on the ability to maintain stability in the foreign-exchange market.

When inflation is low, the trade balance is in surplus and foreign-currency inflows are favourable, a central bank can support liquidity with fewer constraints. Under current conditions, each liquidity decision must also be assessed against its potential impact on the exchange rate.

Credit growth remains high, but liquidity can still tighten

Credit growth reached approximately 17% year on year in July. At the aggregate level, this was a high rate of expansion and showed that bank financing continued to provide substantial support to economic activity.

However, rapid credit growth does not mean that banking-system liquidity is always abundant.

The overnight interbank rate declined to 0.8% in late July before rising rapidly to 6.3% in early August. This sharp movement prompted the State Bank of Vietnam to resume net liquidity injections through open-market operations.

The development highlights the need to distinguish among three different issues: economy-wide credit growth, liquidity within the banking system and the ability of an individual business or project to obtain financing.

Total credit may rise because previously approved loans are being disbursed, working-capital demand is expanding or financing is concentrated among certain categories of borrowers. At the same time, the banking system may still experience shortages of short-term funds during particular periods.

The proportion of cash held outside the banking system also remained above the average recorded during 2024–2025. When money moves outside the banking system, the reserves available for payments and lending decline, making the interbank market more sensitive to liquidity shocks.

When liquidity becomes volatile, banks tend to become more selective. Capital is more likely to favour borrowers with credible cash flow, appropriate collateral, reliable financial reporting and established credit histories.

Businesses and projects with weak balance sheets, long payback periods or heavy dependence on continued borrowing may face greater difficulty even while total banking-system credit continues to expand.

In other words, the economy may not face an aggregate shortage of credit, but capital can still become more expensive, shorter in maturity or more difficult to access in individual cases.

Growth is becoming more capital-intensive

The combination of rapid import growth, exchange-rate pressure and volatile liquidity suggests that economic expansion may be becoming more capital-intensive.

When businesses expand production, they need to import more materials, maintain larger inventories and provide commercial credit to customers. Working-capital requirements therefore rise before the additional revenue is converted into cash.

A business may report higher revenue and accounting profit while still facing a cash shortage if inventories and receivables increase faster than sales.

This becomes particularly important when short-term borrowing is used to finance both working capital and long-term assets. If collection periods lengthen or banks reduce credit limits, liquidity pressure can emerge quickly.

The risk is not limited to interest rates. Exchange-rate movements can also change the amount of capital required. A business that earns revenue in Vietnamese dong but pays for materials, equipment, technology fees or debt in US dollars will need more dong when the exchange rate rises.

If the business cannot adjust its selling prices, higher costs will reduce margins. If prices are increased too quickly, the business may lose customers or market share.

Revenue growth therefore provides an increasingly incomplete picture of financial health. The quality of growth must also be assessed through cash conversion, dependence on borrowing and resilience to changes in costs and financing conditions.

Public investment may support liquidity, but the effect is uncertain

Government revenue reached 72.5% of the annual plan by July, while expenditure stood at approximately 43.4%. Public-investment disbursement reached 41.9% of the annual plan.

The gap between revenue and expenditure indicates that a significant amount of cash is being retained by the Treasury rather than returning to the economy. If public investment accelerates during the remaining months of the year, this money could support aggregate demand, business activity and banking-system liquidity.

However, faster year-end disbursement would not automatically produce an equivalent improvement in economic outcomes.

When a large volume of work is concentrated within a short period, bottlenecks may emerge in administrative procedures, land clearance, materials, labour, imported equipment and project-management capacity.

The relevant question is not only how much capital has been announced or allocated, but how much can actually flow into projects that are ready for implementation.

If disbursement goes into projects with clear legal status, available land and credible implementation capacity, public investment can support both growth and liquidity. If projects are not ready, however, large spending plans may not translate into actual cash flow and economic output within the expected period.

Implications for investors

For investors, the current environment is not a reason to retreat from Vietnam. It does, however, show that strong economic growth cannot replace disciplined evaluation of individual investments.

Import dependence should first be incorporated directly into the investment model. Investors need to determine the proportion of costs linked to the US dollar, the availability of alternative suppliers, the ability to adjust prices and the level of currency movement that margins can absorb.

The next consideration is the capital structure. Investments that use short-term loans to finance long-term assets will be more vulnerable when liquidity becomes volatile. Debt maturity should be aligned with the time required for cash flow to develop and stabilise.

Refinancing risk should also be included in investment scenarios. A project may generate attractive long-term returns and still face a liquidity crisis if debt matures before cash flow becomes sufficient.

Cash-flow quality should carry greater weight than revenue growth alone. Investors should examine the cash-conversion cycle, inventory requirements, collection periods, supplier payment terms and additional working-capital needs at each stage of the investment.

Execution capability is equally important. In a less predictable financial environment, an investment plan based only on assumptions of stable interest rates, a stable currency and continuous access to credit will not provide sufficient protection.

Implications for business leaders

For business leaders, the first priority is to control the quality of growth.

A business plan should answer not only how much revenue is expected to increase, but also how much additional cash must be committed to inventories, receivables, imports and fixed assets to produce that growth.

Budgets should be tested under different exchange-rate and interest-rate scenarios. Businesses should identify the currency level at which margins, debt-service capacity or working-capital requirements begin to deteriorate materially.

Debt maturity structures should also be reviewed. Using short-term funding to finance long-term investment is only sustainable when refinancing access is sufficiently reliable and cash flow can withstand a deterioration in credit conditions.

Major investment decisions should be made only after financing has been arranged with reasonable certainty. Capital plans should not depend solely on the assumption that banks will continue to renew loans or expand credit limits in the future.

Businesses should also reassess their ability to adjust selling prices, renegotiate payment terms with customers and suppliers and develop alternative domestic sources of supply. These are not only procurement issues. They form part of a broader strategy for managing currency and cash-flow risk.

Indicators to watch next

Over the coming months, the first key indicator will be the gap between import and export growth. A narrowing gap would reduce pressure on the trade balance and demand for US dollars. If imports continue to grow much faster than exports, exchange-rate pressure is likely to persist.

The central exchange rate and broader foreign-exchange-market conditions should also be monitored together with the policy response. The relevant issue is not only the exchange-rate level, but also the speed of adjustment and the scale of intervention required.

Interbank interest rates and the scale of open-market operations will provide early indications of liquidity conditions within the banking system.

Credit growth should be assessed together with the direction in which capital is being allocated. Aggregate credit expansion is only genuinely supportive when viable businesses and projects can obtain funding at an appropriate maturity and sustainable cost.

The pace of public-investment disbursement will also influence liquidity and aggregate demand. However, its actual effect will depend on the readiness and implementation quality of the projects receiving funds.

Energy prices, foreign capital flows and changes in international trade policy may also continue to influence inflation, the exchange rate, operating costs and investment returns in Vietnam.

Growth remains strong, but decision standards must rise

Vietnam’s economy continues to grow strongly and to generate credible opportunities. But the financial environment behind that growth is becoming more complex.

Rapid import growth is increasing demand for foreign currency. Exchange-rate pressure is limiting the scope for maintaining abundant Vietnamese-dong liquidity. Credit continues to expand, but the cost and availability of capital may become more uneven.

For investors, market growth remains necessary but is no longer sufficient. Cash-flow quality, capital structure, currency exposure, refinancing capacity and execution capability will increasingly determine investment performance.

For business leaders, the objective should not be growth at any cost. It should be growth that produces cash, remains financially resilient and is supported by an appropriate capital structure.

The issue is not whether investors and businesses should become cautious about Vietnam. The issue is that selection, financing and execution standards must rise in a more unpredictable financial environment.

Photo: Khoa Nguyen

Data sources: World Bank, Viet Nam Macro Monitoring, August 2026; National Statistics Office of Vietnam, Socio-economic Situation in July and the First Seven Months of 2026, 3 August 2026.