Rising energy costs have slowed Vietnam's economic growth to below 8%, and the "double-digit target" has been met with reality.

Vietnam’s economic growth slowed in the first quarter, and rising energy costs have intensified uncertainty.

On Saturday, the General Statistics Office of Vietnam reported that first-quarter GDP grew 7.83% year over year, lower than the 8.46% growth rate in the previous quarter, but still above the market’s 7.6% median expectation.

Manufacturing remains the core engine of economic growth this quarter. In March, exports grew by about 20.1% year over year, and manufacturing growth for the first quarter reached 9.73%.

Meanwhile, in March, the CPI consumer price index rose 4.65% year over year. Vietnam’s government this year aims to keep the inflation increase within 4.5%. In its statement, the General Statistics Office noted:

In the first quarter of 2026, the global situation will remain complex and highly changeable. Escalation of conflicts in the Middle East will cause energy price volatility, disrupt supply chains, and raise inflation.

Middle East conflict hits Vietnam’s energy supply

As a manufacturing country that is highly dependent on imported energy, Vietnam is facing dual pressure stemming from the Middle East war—fuel prices are rising while supply is tightening.

To stabilize domestic fuel prices, Vietnam’s government has tapped an emergency energy reserve fund, and Vietnam’s airlines have also substantially cut flights due to shortages of jet fuel.

To ensure energy security, Vietnam has suspended the collection of certain gasoline, diesel, and aviation fuel taxes. The measure will remain in effect until April 15. At the same time, the government is actively accelerating the transition toward electric vehicles and biofuels to reduce dependence on imported petroleum products.

Nguyen Thi Hong, Governor of the State Bank of Vietnam, wrote on the central bank’s website last week, saying that Vietnam will not trade off macroeconomic stability for short-term growth.

Prime Minister Pham Minh Chinh had also previously warned that global tensions are creating multiple pressures on inflation, interest rates, and energy supply, and may trigger cascading effects on capacity and business operations.

Manufacturing and exports support the growth base

Despite the external environment becoming more complex, Vietnam’s trade data remains strong.

Data from Vietnam’s statistics office shows Vietnam’s trade surplus with the U.S. in the first quarter reached $33.9 billion, up 24.2% year over year.

Last year, Vietnam was the United States’ third-largest source of trade deficits, behind only China and Mexico. In January of this year, Vietnam’s month-on-month trade deficit with the U.S. once surpassed the two countries, moving to the top position.

Exports grew by about 20.1% year over year in March, and manufacturing growth reached 9.73% in the first quarter, continuing to serve as the main driving force behind overall economic growth. At the same time, March imports rose 27.8% year over year, indicating that domestic demand and demand for production inputs remain robust.

To achieve the macro goal of sustained 10% economic growth, Vietnam’s government is vigorously advancing its public investment plan, with hundreds of infrastructure projects being rolled out in parallel.

Among them, Long Thanh International Airport in the outskirts of Ho Chi Minh City is a key flagship project. Prime Minister Pham Minh Chinh has said that this project will begin operations in the fourth quarter of this year.

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