In an interview with Vietstock.vn about perspectives on the economic outlook for 2026, Mr. Nguyen Dinh Tung — Head of Investment at Phu Hung Fund Management JSC (PHFM) — believes that the combined momentum of public investment and domestic consumption will serve as a “foundation” for GDP growth. Alongside an optimistic forecast for economic expansion and exchange rate stability, PHFM also highlights potential opportunities for foreign capital inflows as progress continues on the market upgrade story, particularly for passive investment funds.
Domestic growth is a key driver
What scenario do you forecast for Vietnam’s GDP growth in 2026?
The Vietnamese government has demonstrated strong political commitment to a GDP growth target of above 10%, accompanied by robust pledges on public investment and institutional reforms. However, international financial institutions such as the IMF, World Bank, ADB, HSBC, and UOB remain cautious, maintaining forecasts in the 6–7% range—broadly in line with recent years—while gradually revising them upward based on 2025 data
Based on the government’s public-investment commitments, we believe growth of around 8% is entirely achievable.
The main drivers behind this pace would be increased government spending on public investment and a recovery in manufacturing and exports, which would support incomes and employment, thereby stimulating domestic consumption.
However, several risks could disrupt the economic recovery and warrant close monitoring. These include overly aggressive monetary and fiscal stimulus that could cause inflation to return sooner than expected, potentially constraining policy options, as well as changes in U.S. tariff policies that might abruptly slow the recovery of the manufacturing sector.
How do you assess Vietnam’s room for maneuver in monetary and fiscal policy to achieve its dual growth objectives?
Overall, the U.S. Federal Reserve and the European Central Bank are on track to shift monetary policy from tightening in 2023-2024 to a more neutral phase in 2025-2026 as inflation is gradually brought under control, policy interest rates are trending downward, although still remaining above the average of the past decade. In 2026, the Fed will have more room to cut interest rates than the ECB, with expectations of two more rate cuts in 2026.
As a result, the upcoming global monetary-easing cycle is expected to ease pressure on exchange rates, allowing the State Bank of Vietnam to maintain an accommodative stance with relatively low interest rates to support credit growth. Vietnam also has ample fiscal space and a healthy public-finance balance sheet, with a low public-debt ratio. Against a backdrop of continued external uncertainty, domestic growth drivers will therefore be crucial. The government will continue to focus on accelerating public investment disbursement and supporting domestic purchasing power through measures such as VAT reductions or personal income tax adjustments.
The exchange rate is controlled
What is your forecast for the interest-rate environment in 2026?
Although interbank and deposit interest rates have recently tended to rise, due to current interest rates being at historically low levels and credit growth significantly exceeding deposit growth for a long period.
However, this increase is short-term and not a structural issue due to inflationary pressure. The interest rate increase is driven by high credit demand and accelerated disbursement of public investment at the end of the year. The State Bank of Vietnam still has ample room and tools to maintain monetary market stability and a reasonable interest rate level to support the economy in achieving high growth in 2026.
Where will the pressure on the USD/VND exchange rate in 2026 come from?
In 2025, the USD/VND exchange rate is projected to appreciate by approximately 3.95% year-on-year, significantly higher than the average depreciation of the VND of around 1.8% per year during the 2015-2025 period, indicating more volatile fluctuations in 2025. This development primarily reflects uncertainties related to reciprocal tax policies, coupled with the US dollar remaining strong as US monetary policy tightens more than expected, thereby limiting the room for domestic monetary policy easing and putting further pressure on the exchange rate.
Entering 2026, risks to the USD/VND exchange rate continue to stem mainly from external factors, particularly the possibility of the USD maintaining its strength if the US economy grows better than forecast and the Fed maintains high interest rates for an extended period. In addition, although the probability is not high, the risk from tariff policies remains a potential factor that could affect Vietnam’s export prospects and foreign exchange inflows.
Considering all the above factors, the USD/VND exchange rate in 2026 is expected to continue to appreciate slightly, consistent with the average adjustment trend of the previous period and the policy direction supporting growth. With a relatively solid macroeconomic foundation and the flexible management approach of the State Bank of Vietnam, exchange rate fluctuations are likely to be controlled within a narrow range, rather than forming a sharp depreciation cycle.
Vietnam is one of the potential markets for investment
What scenarios do you forecast for foreign indirect investment (FII) flows in 2026, especially if there is new progress in the stock market upgrade? What are the factors that foreign investors are most interested in?
When analyzing FII flows, they can be divided into two main groups: passive and active flows.
For passive flows, Vietnam’s upgrade to emerging market status is expected to attract capital from FTSE Emerging Markets index funds.
Meanwhile, active flows are likely to remain under net selling pressure in the short term, reflecting the general trend of global capital flows as institutional investors continue to withdraw capital from frontier and emerging markets. However, the upgrade will open up access opportunities for some funds that were previously restricted by investment criteria.
Furthermore, foreign ownership is currently at a historical low, so it is expected that foreign investors will reduce net selling and soon return to the market.
When investing in emerging markets like Vietnam, foreign investors typically focus on three core factors: growth potential, accessibility, and stability.
The core objective of investment is always to maximize asset value growth. In this context, Vietnam is considered one of the markets with the most outstanding growth potential in the region.
Regarding accessibility, key factors include foreign ownership limits and the transparency of market information.
Regarding stability, investors expect a stable political environment, an effectively managed macroeconomic foundation, and manageable exchange rate risks. These factors act as a protective layer for the investment, while also facilitating efficient divestment when necessary.
Source: Vietstock.vn