Hanoi (VNA) – Vietnam is expected to maintain stable growth, make the most of foreign direct investment (FDI), strengthen domestic capacity, and policy consistency to navigate challenges in 2026, according to a new report by HSBC.
In its latest ASEAN Perspectives 2026: Testing Endurance, Strength, and Character, HSBC likens the coming year to an economic endurance arena for ASEAN economies. As global trade patterns adjust, a new technology cycle gathers pace, and political-policy risks remain intertwined, policy discipline will determine which economies sustain momentum and which falter.
Although concerns over tariffs and front-loaded export orders have begun to ease, ASEAN enters 2026 on relatively solid footing. Among regional economies, Vietnam stands out for its ability to maintain stable growth, supported by resilient trade, improving domestic fundamentals, and ample policy space, the report said.
A regional leader in domestic growth
HSBC analysts describe 2025 as a paradox for global trade: uncertainty intensified, yet exports remained robust. Notably, ASEAN’s share of global exports climbed from approximately 7.4% in 2023 to nearly 9.4% in 2025. This gain has not been confined to traditional markets such as the US or China, but occurred across multiple trade corridors, suggesting that ASEAN, including Vietnam, is evolving from a temporary beneficiary of trade diversion into an increasingly integral node in global commerce.
FDI inflows have continued to concentrate in major export-oriented sectors, particularly electronics, electrical equipment, components, and industries linked to artificial intelligence (AI). In the first three quarters of 2025, FDI into ASEAN rose by 8.5% year-on-year, moderating from the previous year but remaining resilient. Vietnam and Malaysia were among the most prominent destinations. Crucially, these inflows bolster medium- and long-term export capacity rather than merely providing a short-term boost.
HSBC notes that roughly one-third of ASEAN’s exports are electronics-related, forming a cornerstone of the AI value chain. Vietnam ranks among the four ASEAN economies with a high share of products such as automatic data processing equipment and printed circuit boards - key components underpinning global AI infrastructure.
Contrary to fears of a technology bubble, AI continues to be assessed as a structural, long-term trend. In this context, Vietnam is moving beyond its traditional role as an assembly hub. By attracting high-tech FDI, expanding the ecosystem of supporting industries, and upgrading labour quality, the country is gradually enhancing its position within supply chains. This progression reduces vulnerability to short-term global demand adjustments.
HSBC highlights three regional economies expected to outperform relative to potential in 2026: Malaysia, Vietnam, and Singapore. These economies have not only ensured that trade benefits spill over into the domestic economy but have also deployed fiscal policy effectively to sustain momentum.
In 2025, wages in Vietnam increased more rapidly than in many regional peers, supporting retail sales growth of nearly 10% year-on-year. Credit expansion has remained positive, indicating stable confidence among businesses and consumers. By contrast, Indonesia and Thailand have faced greater difficulty in stimulating domestic demand, while the Philippines has seen households increase savings following several years of elevated inflation. This comparison underscores Vietnam’s more balanced growth model, combining export strength with improving domestic consumption.
Vietnam maintains proactive stance in monetary policy
A key differentiator for Vietnam, according to HSBC, is its fiscal headroom. With public debt as a share of GDP at a relatively low level, the country retains the flexibility to expand spending when necessary.
In 2026, Vietnam is expected to accelerate infrastructure investment and structural reforms, with a direction to maintain a fiscal deficit above pre-pandemic levels. This approach is designed not only to support short-term growth but also to enhance long-term competitiveness.
Compared with Indonesia where fiscal experimentation includes large-scale programmes such as free school meals and the Danantara sovereign wealth initiative, Vietnam benefits from greater policy consistency and implementation capacity. Thailand and the Philippines, meanwhile, face constraints stemming from higher public debt burdens or protracted institutional reform processes.
Vietnam is under less pressure to aggressively ease policy than peers such as the Philippines, Thailand, or Indonesia. With growth relatively firm and inflation contained, authorities have been able to preserve exchange rate stability, mitigate financial risks, and maintain policy buffers in case global conditions deteriorate.
Equally important, policy transmission in Vietnam remains comparatively effective, particularly when contrasted with economies carrying higher household debt levels such as Thailand. This enhances the potency of monetary measures when deployed./.
