The Organisation for Economic Co-operation and Development (OECD) has raised its medium-term growth forecast for Vietnam, projecting GDP expansion of 6.2% in 2026 and 5.8% in 2027, according to its latest Global Economic Outlook released on Tuesday, December 2. The revision reflects the country's continued macroeconomic stability despite persistent global trade uncertainties.
The report highlighted Vietnam's strong recovery in 2025, with GDP growing 8.2% in the third quarter, driven by robust private consumption, firm investment in fixed capital, and resilient exports of goods and services.
Labour market conditions remain stable, with unemployment at 2.2% since the third quarter of 2024—the lowest level on record—while rising labour force participation points to improving employment conditions.
However, the OECD warned that external demand is expected to soften in 2026, which could weigh on exports, a key pillar of Vietnam's open, trade-dependent economy. On the domestic front, private consumption is projected to remain steady, supported by rising real wages and employment.
At the same time, a planned VAT adjustment in 2027 may temporarily dampen consumer spending, while inflation is expected to edge higher due to strong domestic demand, administrative price increases, and the VAT hike.
Public investment is expected to play a crucial role in sustaining growth. Following earlier delays, disbursement of public funds is accelerating, providing a strong anchor for aggregate demand. OECD noted that the upward revision of the 2026 growth forecast by 0.2 percentage points reflects these positive developments.
Vietnam's exports have remained resilient despite global volatility. In the first nine months of 2025, export turnover rose 15.5%, up from 14.2% in the first half of the year. Shipments to the United States—the country's largest export market—surged 27.7%, even amid potential risks from import tariffs. Foreign direct investment (FDI) has also expanded steadily since mid-2023, supplying vital capital, promoting technology transfer, and boosting productivity.
Fiscal policy remains expansionary as the government accelerates public investment to meet its ambitious 2025 growth target of around 8%. However, OECD recommends gradually moving toward a neutral fiscal stance in the medium term to manage rising inflationary pressures. The temporary VAT reduction from 10% to 8% will end in late 2026, adding to price pressures alongside planned increases in pensions, the minimum wage, and public service fees.
Monetary policy has remained accommodative since June 2023, using interest rate cuts and credit growth targets. Yet the OECD cautioned that rising domestic demand and policy-driven cost pressures could heighten inflation risks, suggesting the central bank should remain vigilant.
The OECD also identified potential downside risks, including a slowdown in global trade, tighter international investment conditions, and policy changes in major economies that could impact Vietnam's export competitiveness. It emphasized that structural reforms, such as stronger incentives for formal employment, greater competition in services markets, and reducing the dominance of state-owned enterprises, could bolster productivity and long-term growth.
Despite a projected moderate slowdown in 2026–2027, the OECD affirmed that Vietnam remains one of Asia's fastest-growing economies. Other international institutions share this view: HSBC recently raised Vietnam's growth forecasts to 7.9% for 2025 and 6.7% for 2026, UOB expects 7.7% in 2025, and Standard Chartered projects 7.5% for 2025 and 7.2% for 2026.
