Vietnam enters the second half of 2026 with an ambitious target: to achieve double-digit growth for the full year, GDP growth in the final six months must reach nearly 11.7%. This is a demanding objective, requiring strong coordination across public investment, industrial production, domestic consumption, exports, FDI, and macroeconomic stability.
The first half of 2026 has provided a solid foundation. GDP grew by 8.18%, industrial production expanded strongly, registered FDI increased by 61%, total social investment rose by nearly 13%, exports grew by 21%, and state budget revenue reached around 62% of the annual estimate. These indicators show that the economy still maintains meaningful recovery and expansion momentum.
However, the 11.7% growth target for the second half is not merely a matter of acceleration. It is also a test of the economy’s ability to absorb capital, the quality of policy execution, the strength of domestic demand, the resilience of the production sector, and the capacity to maintain exchange-rate, inflation, and liquidity stability. For businesses, the current macro environment is not just background information; it must be integrated directly into business strategy, capital planning, and risk management.
1. The 11.7% target is highly ambitious because the economy must accelerate beyond its first-half pace
GDP growth of 8.18% in the first half was a strong result, but it remains below the pace required to achieve double-digit growth for the full year. As a result, the second half must deliver growth of nearly 11.7%, while inflation still needs to be controlled around the target of approximately 4.5%.
This is a highly challenging level. To achieve it, the economy must not only sustain existing growth drivers but also accelerate meaningfully across key pillars: public investment, industrial production, exports, consumption, tourism, services, capital disbursement, and credit directed toward productive business activities.
For businesses, the operating environment may become more active in the second half of the year. However, high macro growth does not mean that every industry or every company will benefit. Businesses with strong financial foundations, effective operations, disciplined cash-flow management, and access to long-term capital will be better positioned. In contrast, companies expanding too quickly without controlling inventory, receivables, foreign-exchange exposure, and funding costs may face pressure even in a growing market.
2. Key growth drivers: production, FDI, and public investment remain central
The strongest foundation for the high-growth target in the second half lies in production and investment, which continue to show strong momentum.
Industrial production increased by 10.8% in the first half, with manufacturing rising by 11.4%. This sector has broad spillover effects across logistics, industrial parks, raw materials, labor, machinery, packaging, transportation, technical services, and supporting industries.
FDI remains another bright spot. Total registered FDI reached more than USD 34.6 billion, up 61%, while disbursed FDI reached around USD 13 billion, up more than 11%. These figures indicate that Vietnam continues to benefit from supply-chain relocation, production-capacity expansion, and regional investment restructuring.
Public investment also has significant room to accelerate. Although first-half disbursement remained below expectations, the remaining capital available for the second half is substantial. If bottlenecks related to site clearance, construction materials, investment procedures, regional coordination, and local execution capacity are resolved more quickly, public investment could generate meaningful spillover effects across multiple sectors.
For businesses, the key question is readiness. The ability to deliver orders, control quality, secure supply, hire talent, manage working capital, and expand capacity at the right pace will determine whether macro opportunities can be converted into real revenue and profit.
3. Foreign reserves of USD 87.6 billion: necessary, but still a thin buffer
Vietnam’s foreign exchange reserves reached nearly USD 87.6 billion as of June 18, 2026. This indicates that the country still maintains a certain capacity to intervene in the foreign-exchange market. However, given the rapid rise in imports, this reserve level is equivalent to only around eight weeks of imports. It is therefore not a thick enough buffer to justify complacency against external shocks.
The current reserve level is also significantly below the record high of more than USD 111.8 billion recorded in January 2022. Meanwhile, in the first half of 2026, imports grew by 33.4%, faster than export growth of 21%, leading to a goods trade deficit of USD 16.65 billion. This reflects strong foreign-currency demand, largely driven by imports of raw materials, machinery, components, and production inputs.
Therefore, current foreign reserves should be viewed as a necessary but relatively thin buffer — not as a sufficiently strong signal that exchange-rate risk has disappeared. If imports continue to grow rapidly, the trade deficit persists, capital inflows slow, or global financial markets become more volatile, exchange-rate pressure could return.
For businesses that import raw materials, borrow in foreign currency, make USD-denominated payments, or rely on overseas equipment and components, exchange-rate risk should be formally embedded into business planning. Companies should develop FX scenarios, assess profit-margin sensitivity, balance foreign-currency inflows and outflows, renegotiate payment terms where possible, and prepare appropriate hedging tools.
4. Growth is still unbalanced: production is moving faster than domestic demand
One issue that requires close attention is that current growth is leaning heavily toward production, investment, FDI, and imported inputs. Domestic consumption is recovering, but it has not yet accelerated strongly enough to match the pace of production expansion.
Total retail sales of goods and consumer services increased by 12.9% in nominal terms in the first half. However, after excluding price effects, real growth was around 7.3%. This is positive, but still materially lower than the pace of industrial production, imports, and asset accumulation.
Manufacturing inventories rose by 13.3% year-on-year, which is another indicator to monitor. Higher inventories are not necessarily negative if companies are preparing for new orders or stronger consumption in the following quarters. But if inventories grow faster than actual sales, pressure on cash flow, storage costs, short-term borrowing needs, and profit margins will increase.
This is the time for businesses to clearly distinguish between revenue growth and cash-flow growth. A company may report higher revenue, but if receivables increase quickly, inventories expand, and the cash conversion cycle lengthens, it may face liquidity pressure even while its reported business performance appears positive.
5. Feasibility of the 11.7% target: possible, but highly dependent on execution quality
The target of nearly 11.7% growth in the second half is very high, but not impossible if key growth drivers are activated simultaneously and effectively.
The first condition is that public investment must accelerate in a substantive way. Faster disbursement alone is not enough. Capital must flow into projects that generate real output, jobs, demand for materials, logistics activity, infrastructure capacity, and regional connectivity. If public investment rises on paper but is slow to translate into real economic activity, its impact on growth will be limited.
The second condition is stronger domestic consumption. Tourism, services, retail, social housing, wage reform, healthcare, education, and demand-stimulus programs can all support purchasing power. However, businesses should not simply wait for broad policy-driven demand. They need to proactively adjust products, pricing, distribution channels, customer experience, and service models to convert macro demand into actual orders.
The third condition is maintaining exchange-rate, interest-rate, and liquidity stability. If credit growth is pushed strongly to support GDP growth while deposit mobilization fails to keep pace, funding costs may rise. In that case, businesses with high leverage or heavy reliance on short-term borrowing will feel the pressure first.
The fourth condition is that exports must maintain their recovery momentum. Export growth of 21% in the first half is encouraging, but the external environment remains uncertain. Geopolitical tensions, trade volatility, transportation costs, energy prices, and demand from major markets could all affect orders in the second half.
6. Key risks businesses should monitor closely
The first risk is inflation. Average CPI increased by 4.38% in the first half, still within the policy target, but with limited room left relative to the approximately 4.5% target. If energy, construction materials, logistics, public services, or food prices rise again, business input costs may come under pressure. Companies should prepare pricing plans, optimize production costs, review input contracts, and protect profit margins.
The second risk is the exchange rate. The current reserve buffer is thin relative to the scale of imports. With imports growing rapidly and the trade balance in deficit, businesses with foreign-currency obligations should avoid complacency. FX risk management should become part of budgeting, product pricing, and contract-risk evaluation.
The third risk is funding cost. In a high-growth environment, demand for working capital, inventory financing, machinery investment, and market expansion capital will all increase. If companies do not prepare their capital structure early, short-term funding pressure may emerge precisely when borrowing costs become more volatile.
The fourth risk is internal growth quality. Not every business should expand rapidly. Expanding capacity without adequate quality control, inventory management, supplier management, and cash-flow discipline will increase operational risk. In many cases, growing too fast can expose weaknesses in internal management systems.
7. Strategic implications for businesses
In an environment of high growth targets but persistent macro risks, businesses should pursue disciplined growth.
First, companies should reassess their second-half plans across three layers: revenue, cash flow, and operational capacity. If revenue rises but cash flow weakens, receivables, inventories, and trade-credit policies must be controlled. If orders increase but delivery capacity is limited, businesses should prioritize processes, people, supply chains, and quality control. If capital needs rise, financing plans should be prepared before liquidity pressure appears.
Second, businesses need clearer macro scenarios. Planning should not rely only on assumptions of stable interest rates, stable exchange rates, and steadily rising demand. Companies should develop at least three scenarios — base, upside, and downside — for key variables such as exchange rates, raw-material costs, customer payment cycles, credit limits, pricing power, and public-investment disbursement.
Third, businesses need to upgrade capital management. In a high-growth cycle, rising capital needs are normal. But quality capital will prioritize companies with transparent financial statements, clear cash flows, specific use-of-funds plans, and reliable risk-management systems. Financial standardization is therefore not only an accounting requirement; it is a condition for accessing long-term capital.
Fourth, businesses should actively manage FX and import-input risks. Companies dependent on raw materials, machinery, components, or foreign-currency borrowing should identify their break-even exchange rate, the FX level that pressures margins, and their ability to pass part of the cost increase into selling prices. This should be a regular part of financial management, not a reaction only when markets become volatile.
Conclusion: A high target creates opportunity, but management discipline determines the outcome
The target of nearly 11.7% growth in the second half reflects a strong commitment to placing Vietnam’s economy on a high-growth trajectory. The current foundation includes several advantages: recovering production, strong FDI, remaining room for public investment, positive budget revenue, and increasingly proactive growth-support policies.
But feasibility does not mean ease. The economy still faces important issues: domestic consumption has not yet broken out strongly, imports are rising faster than exports, the trade balance is in deficit, manufacturing inventories are increasing, and foreign reserves are equivalent to only around eight weeks of imports. These signals indicate that macro stability must be carefully protected while growth is being accelerated.
For businesses, the core message is clear: capture the growth cycle, but do not compromise financial discipline. Companies that manage cash flow effectively, control FX exposure, optimize inventory, standardize internal systems, and proactively structure capital will be better positioned to turn macro opportunity into sustainable growth.
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Data source: National Statistic Office, SBV/VGP
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EPS supports businesses in strengthening management foundations
In a high-growth environment with multiple variables around exchange rates, funding costs, inventories, cash flow, and market demand, businesses need more than expansion. More importantly, they need to strengthen their financial, operational, and management foundations so they can absorb growth in a sustainable way.
EPS provides Corporate Restructuring Advisory services, focusing on helping businesses review their financial structure, cash flow, operating efficiency, management capability, and readiness for important decisions related to capital, expansion, strategic partnerships, or M&A.
Our practical support includes:
- Reviewing financial health, cash flow, working capital, receivables, inventories, and funding costs;
- Assessing operating efficiency, cost structure, profitability, and bottlenecks in the business model;
- Redesigning capital structure, financing plans, and use-of-funds strategy for the next growth phase;
- Standardizing financial reports, management data, and internal control systems to improve transparency;
- Preparing the foundation for business expansion, capital readiness, strategic partnerships, divestment, acquisition, or M&A decisions.
By combining experience in corporate finance, restructuring, operational management, and capital transactions, EPS helps businesses see more clearly where value is being created, where cash is trapped, which risks must be addressed, and which foundations need to be strengthened before entering the next growth cycle.
High growth creates opportunity. But businesses can only go further when their financial foundation, cash flow, and management systems are strong enough.
