Vietnam: Robust growth makes inflation harder to contain – DBS

With headline inflation hovering around 5%, above the 4.5% target, DBS Group Research expects Vietnam’s exports and retail sales to remain robust in October 2026. Activity is supported by strong electronics shipments, resilient household spending and tourism. However, high transport, energy, food and material costs complicate policy as the authorities seek economic growth of at least 10%.

Demand remains robust as inflation stays elevated

"We expect Vietnam’s October 2026 goods exports and retail sales to remain robust at 42.0% yoy and 14.0% yoy year-to-date, respectively, while headline inflation is likely to stay elevated at around 5.0% yoy."

"Exports have continued to be supported by strong electronics and machinery shipments amid a favourable technology cycle with spillovers from robust artificial intelligence-related demand."

"Retail sales were likely bolstered by firm household spending, supported by favourable labour market conditions, and continued strength in tourism. "

"Headline inflation has remained elevated and above the central bank’s target of 4.5% for the year, driven by price pressures from transport and energy, food, as well as material costs. This poses a challenge for policymakers as they seek to balance inflation risks against ambitions of achieving at least 10% economic growth this year."

(An editor reviewed this article, which was produced with assistance from an Artificial Intelligence tool. Find out more.)