Singapore's United Overseas Bank (UOB) raised its forecast for Vietnam's GDP growth in 2026 from 8.5% to 9.2% after stronger-than-expected third-quarter results and upward revisions to first-half figures.
However, the bank said the 10% growth target would be difficult to achieve, while rising inflation would complicate monetary policy management.
In its latest macroeconomic report, UOB also raised its 2027 growth forecast from 8.4% to 8.8%.
Vietnam's GDP grew 9.95% year-on-year in the third quarter. Growth in the first nine months reached 9.01%, exceeding UOB's 9% forecast and the 8.65% Bloomberg consensus.
To reach its full-year forecast, the economy would need to grow by about 9.7% in the fourth quarter. Support could come from year-end public investment disbursement, a seasonally strong export quarter and record foreign direct investment inflows.
Meeting the official 10% target would require growth of roughly 12.5–13% in the fourth quarter. UOB said the target would probably remain out of reach, although 2026 growth would be higher than the 8% recorded in 2025.
S&P Global's manufacturing Purchasing Managers' Index (PMI) fell from 53.3 in August to 51.9 in September. New export orders declined for a second consecutive month, at the fastest pace since April.
UOB's upgraded 2027 forecast reflects expectations that registered foreign direct investment will increasingly translate into production capacity. The bank also factors in industrial upgrading and higher-value manufacturing.
In the first nine months of 2026, registered foreign direct investment reached 50.36 billion USD, up 76.4% year-on-year. Disbursed investment rose 12.1% to 21.07 billion USD.
UOB identified key risks including energy price spikes linked to the unresolved US-Iran conflict, possible tighter US tariffs after the 2026 midterm elections, power supply and other infrastructure constraints, and delays in public investment execution.
UOB also raised its average 2026 inflation forecast for Vietnam from 4.1% to 4.7%. The consumer price index rose 5.08% year-on-year in September, while average inflation in the first nine months reached 4.52%, exceeding the official 4.5% target. The bank expects headline inflation to remain around 5% in the fourth quarter.
Above-target inflation, rapid credit growth and the prospect of further US Federal Reserve rate increases are complicating monetary policy management for the State Bank of Vietnam.
Tighter monetary policy may have little effect on inflationary pressure, which is largely driven by supply-side factors.
“We expect the SBV to hold the refinancing rate at 4.5% through 2027, relying on open market operations and credit-quota guidance, but see the risk now skewed towards a hike,” UOB said.
Source: Vietnam News Agency (VNA).
Sources: VietnamPlus / Vietnam News Agency
