Myriad risks ahead, but ones Vietnam can confront

Myriad risks ahead, but ones Vietnam can confront

Vietnam enters 2026 from a position of strength and is currently one of the fastest-growing economies in Asia. This strong recent performance reflects not only a rebound from recent shocks, but also deeper structural changes in how the economy is evolving.

Xavier Depouilly, general manager DXL Research & Consulting

The key question shall no longer be how fast Vietnam can grow, but how well that growth can be sustained and shared across businesses, sectors, and the population.

Business sentiment provides an early indication of economic direction. The Business Confidence Index (BCI), conducted by DXL Research for the European Chamber of Commerce in Vietnam, reached 80 points in Q4/2025, returning to pre-pandemic levels.

Around 65 per cent of companies described their current business situation as “good” or “very good”, while 69 per cent expressed a positive outlook for the first quarter of 2026.

Confidence is especially strong among larger companies. Firms with more than 500 employees report even higher optimism, which is significant as these businesses typically invest with a long-term horizon. Their activity supports local suppliers, service providers, and employment, helping strengthen the broader domestic market, including small and medium-sized enterprises.

Meanwhile, tourism was a major contributor to Vietnam’s economic momentum in 2025. Official figures show that more than 21 million international visitors arrived last year, the highest number ever recorded. This recovery supported growth across multiple sectors, including retail, transport, hospitality, and entertainment.

Beyond the main urban centres, tourism has also driven growth in central Vietnam, particularly in Danang and nearby provinces. At the same time, rising incomes are encouraging Vietnamese households to spend more on travel, leisure, and services. This shift towards experience-based consumption is expected to continue in 2026, helping balance the economy and support local businesses.

For many companies, the focus has clearly moved beyond recovery from the pandemic era. BCI survey results show that half of businesses now prioritise business development and diversification, rather than cost reduction. This signals a healthier phase of growth, as firms actively seek new customers, products, and opportunities within Vietnam and in the region.

As we look towards 2026, the roadmap is clear. The World Bank projects growth to moderate slightly to a sustainable 6.3 per cent before accelerating again in 2027, allowing the economy to digest recent gains and focus on efficiency. This growth rate remains strong by international standards and reflects a more stable and sustainable pace.

Elsewhere, technology adoption is becoming increasingly visible across the economy. Around 40 per cent of businesses plan to expand their use of digital tools, automation, or AI. This trend is not limited to large corporations. DXL’s latest consumer research, conducted in December among 900 respondents across four major cities, shows that nearly one in five urban residents already use AI-based tools regularly, mainly for work productivity and information search.

Over time, higher productivity supports wage growth and more sophisticated consumer demand. This creates opportunities not only for technology firms, but also for retailers, service providers, and local brands that can adapt to digital expectations.

Despite these positive signs, 2026 will not be without risks. Vietnam remains exposed to global shocks, including changes in trade patterns and geopolitical tensions. Climate-related risks and supply chain disruptions also remain relevant, as experienced in recent years.

At the same time, internal reforms and administrative adjustments continue to reshape the business environment. These changes are necessary, but they require companies to stay informed and adaptable. Ensuring that growth benefits small businesses, workers, and households will be an important part of building sustainable, inclusive growth.

Vietnam’s outlook for 2026 is encouraging. The foundations for growth are strong, supported by confident businesses, recovering tourism, and evolving domestic demand. The next phase will depend on adaptability, inclusion, and the capacity to manage new external shocks.

For investors and companies, the opportunity is no longer only about producing and exporting from Vietnam, but about growing together with a domestic market that is becoming more digital, more sophisticated, and more demanding.

VIR