Việt Nam to remain Southeast Asia's fastest-growing economy despite regional slowdown: ADB

Việt Nam to remain Southeast Asia's fastest-growing economy despite regional slowdown: ADB

In its July update of the Asian Development Outlook (ADO), ADB maintained Việt Nam's economic growth forecast at 7.2 per cent for 2026 and 7 per cent for 2027, among the highest rates in developing Asia.

Gemalink Port, HCM City. ADB maintained Việt Nam's economic growth forecast at 7.2 per cent for 2026 on continued strength in manufacturing, resilient exports and investment, and stable domestic demand. — VNA/VNS Photo Hoàng Nhị

Việt Nam is expected to remain Southeast Asia's fastest-growing economy over the next two years, the Asian Development Bank (ADB) said on Thursday, keeping its growth forecasts unchanged even as it lowered its outlook for developing Asia and the Pacific amid rising energy costs and geopolitical tensions.

In its July update of the Asian Development Outlook (ADO), ADB maintained Việt Nam's economic growth forecast at 7.2 per cent for 2026 and 7 per cent for 2027, among the highest rates in developing Asia.

The outlook reflects continued strength in manufacturing, resilient exports and investment, and stable domestic demand.

Inflation in Việt Nam is forecast to rise to 4 per cent this year from 3.3 per cent in 2025 before easing to 3.8 per cent in 2027.

The upbeat outlook contrasts with a weaker regional picture.

ADB cut its growth forecast for developing Asia and the Pacific to 4.9 per cent in 2026 from 5.5 per cent in 2025, and by 0.2 percentage points from its April projection, citing prolonged disruption to global energy markets caused by conflict in the Middle East.

The growth projection for the region is maintained at 5.1 per cent in 2027, reflecting recovering activity as these pressures ease.

ADB said inflation across developing Asia is now projected at 4.3 per cent this year, up from 3 per cent in 2025 and 0.7 percentage points higher than forecast in April, as higher energy prices spill over into fertilisers, other commodities and supply chains. Regional inflation is expected to moderate to 3.4 per cent in 2027.

“Economic growth in developing Asia and the Pacific remains resilient, but persistent headwinds caused by the conflict require a careful policy balance between supporting growth and containing inflation,” said ADB Chief Economist Albert Park.

The report warned that renewed escalation of geopolitical conflicts remains a major downside risk to the region's outlook, with the potential to tighten energy markets further, intensify inflationary pressures and increase external vulnerabilities.

Tighter global financial conditions could also raise sovereign borrowing costs and widen fiscal deficits in some economies, while higher tariffs and persistent trade policy uncertainty threaten investment and trade, ADB said. Rising fertiliser prices also continue to pose risks to agricultural output and food security.

Growth forecasts for most subregions were revised lower for 2026, with the exception of developing East Asia.

ADB left its forecast for China unchanged at 4.6 per cent in 2026 and 4.5 per cent in 2027, supported by strong exports and infrastructure investment.

India's growth projection for 2026 was lowered to 6.6 per cent as higher energy costs weigh on domestic demand, while its 2027 forecast remained unchanged at 7.3 per cent. 

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