Energy costs are soaring, Vietnam's economic growth slows to below 8%, and the "double-digit target" faces real obstacles.

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Vietnam's economic growth slowed in the first quarter, and rising energy costs increased uncertainty.

On Saturday, Vietnam's National Bureau of Statistics announced that GDP grew by 7.83% year-on-year in the first quarter, lower than last quarter's 8.46%, but still above the market median expectation of 7.6%.

Manufacturing remains the core driver of economic growth this quarter, with exports in March up about 20.1% year-on-year, and manufacturing grew by 9.73% in the first quarter.

Meanwhile, the consumer price index (CPI) rose 4.65% year-on-year in March. Vietnam's government aims to keep inflation growth under 4.5% this year. The National Bureau of Statistics stated in its release:

The global situation in the first quarter of 2026 remains complex and volatile, with escalating Middle East conflicts causing energy price fluctuations, supply chain disruptions, and rising inflation.

Middle East Conflict Impacts Vietnam's Energy Supply

As a manufacturing powerhouse highly reliant on imported energy, Vietnam is facing dual pressures from the war in the Middle East: rising fuel prices and tightening supply.

To stabilize domestic fuel prices, the Vietnamese government has utilized emergency energy reserve funds, and airlines in Vietnam have sharply cut flights due to shortages of aviation kerosene.

To ensure energy security, Vietnam has suspended collection of certain taxes on gasoline, diesel, and aviation fuel; this measure will last until April 15. Meanwhile, the government is actively promoting a transition to electric vehicles and biofuels to reduce reliance on imported petroleum products.

Nguyen Thi Hong, Governor of the State Bank of Vietnam stated last week on the central bank's official website that Vietnam will not pursue short-term growth at the expense of macroeconomic stability.

Prime Minister Pham Minh Chinh also warned earlier that rising global tensions are putting multiple pressures on inflation, interest rates, and energy supply and may have a chain effect on production capacity and corporate operations.

Manufacturing and Export Support Fundamental Growth

Despite a more complex external environment, Vietnam's trade data remains strong.

According to the Bureau of Statistics, Vietnam's trade surplus with the US reached $33.9 billion in the first quarter, up 24.2% from last year.

Vietnam was already the third largest source of the US trade deficit last year, behind only China and Mexico. In January this year, Vietnam's monthly US trade deficit briefly surpassed both countries, claiming the top spot.

Exports in March increased by about 20.1% year-on-year, and manufacturing grew by 9.73% in the first quarter, continuing to serve as the main driving force for overall economic growth. Meanwhile, imports in March rose by 27.8% year-on-year, indicating strong domestic demand and production input needs.

To achieve its macro target of sustained 10% economic growth, the Vietnamese government is vigorously advancing public investment programs, with hundreds of infrastructure projects underway.

Among them, Long Thanh International Airport in the suburbs of Ho Chi Minh City is a key flagship project. Prime Minister Pham Minh Chinh is pushing for it to be operational in the fourth quarter this year.

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