Amid global oil price fluctuations resulting from the Middle East conflict and uncertainty over US trade tariffs, Vietnam recorded a 7.83% year-on-year GDP growth in the primary quarter of 2026. This value exceeded the 7.07% recorded in the primary quarter of 2025 and marked the very best first-quarter growth rate in Vietnam’s history.
The contrast is sort of striking. Most economies within the region slowed through the same quarter. Malaysia grew by 5.3% and Singapore by 4.6%, while Thailand and the Philippines only grew by 2.8%.
Of these countries, only Indonesia and Thailand exceeded market expectations. Indonesia rose 5.61%, surpassing analyst consensus of 5.40%, while Thailand rose from 2.5% in Q4 2025 to exceed forecast 2.2%. Still, each results remained well below Vietnam’s.
The Philippines suffered probably the most. The growth rate of two.8% was the slowest in five years and missed the consensus of three.5% as April inflation hit a three-year high resulting from rising fuel prices.
What drives economic growth
Vietnam’s industrial and construction sector grew by 8.92% in the primary quarter of 2026, generating 44.08% of the economy’s total gross value added. This growth was driven primarily by electronics exports.
Exports of electronics, computers and components increased by 45.5% year-on-year to achieve USD 30.7 billion in the primary quarter of 2026, greater than doubling the expansion rate of total exports of 19.1%.
This just isn’t a brand new phenomenon, but a continuation of a long-term structural trend. Foreign corporations operating in Vietnam account for about 98% of the country’s total electronics exports, which will probably be value $126.5 billion in 2024, accounting for one-third of the country’s total export earnings.
Companies resembling Samsung Electronics, Intel and LG Electronics have long made Vietnam a serious manufacturing base in Southeast Asia.
FDI surges as investor confidence continues
In the primary three months of 2026, Vietnam attracted a complete of over $15.2 billion in foreign direct investment (FDI), up 42.9% year-on-year. Completed FDI disbursements reached USD 5.4 billion. These numbers far exceeded the expectations of many international financial institutions.
The surge in capital inflows was largely driven by several large projects within the manufacturing, high-tech and energy sectors. Outside of those projects, overall FDI growth could be more moderate, indicating that investment performance still relies heavily on high-capacity investments.
Domestic consumption and services also increased
Vietnam’s growth in Q1 2026 was not supported by exports alone. Final consumption increased by 8.45% yr on yr, and the services sector increased by 8.18%. International tourist arrivals reached 6.76 million in the primary quarter, the very best figure ever recorded for this era.
Growth, which is not any longer solely based on exports and manufacturing but is increasingly supported by services and domestic demand, signals that Vietnam’s expansion is on stronger foundations. At a time when neighboring countries are under pressure from rising imported energy prices, Vietnam stays relatively protected as its strong export position has helped keep its external balance in check.
Why can Vietnam do that while others cannot?
Part of the reply lies in Vietnam’s import pattern. About 94.1% of the country’s imports are raw materials and machinery utilized in production, relatively than consumer goods. As a result, a rise in imports is mostly an indication of factory expansion relatively than depletion of buying power.
Domestic consumption increased yr on yr by 8.45%, and within the services sector by 8.18%. International tourist arrivals reached 6.76 million in the primary quarter of 2026, the very best ever recorded for this era. In other words, Vietnam’s growth just isn’t depending on a single factor.
On the opposite hand, the World Bank has identified Thailand as one in all the economies most vulnerable to global energy shocks resulting from its heavy dependence on imported energy.
Meanwhile, in April 2026, the Philippines recorded its highest inflation rate in three years as household consumption fell and investment weakened as fuel prices rose.
More broadly, the identical pressures are felt across the region. However, not every country has a powerful enough export production base to soak up it.
