Vietnam is projected to remain the fastest-growing economy in Southeast Asia, with the Asian Development Bank (ADB) maintaining its growth forecasts of 7.2 percent for 2026 and 7.0 percent for 2027 in its Asian Development Outlook (ADO) July 2026, released on July 8.
The forecasts rank among the highest in developing Asia and the Pacific, reflecting the continued resilience of Vietnam’s manufacturing sector, sustained export and investment performance, and stable domestic demand. Inflation is predicted to rise from 3.3 percent in 2025 to 4 percent this year before easing to 3.8 percent in 2027.
Vietnam stands out as one of the brightest performers in the latest ADB report, which lowered its growth forecast for Asia and the Pacific to 4.9 percent in 2026, down from 5.5 percent in 2025 and 0.2 percentage points below the projection issued in April.
According to the July ADO, prolonged disruptions in global energy markets caused by the conflict in the Middle East have exerted greater-than-expected pressure on the region’s economic outlook. Nevertheless, the bank maintained its 2027 regional growth forecast at 5.1 percent, anticipating that economic activity will regain momentum as these pressures gradually subside.
The outlook expects uncertainties in global energy markets to ease only gradually despite the temporary agreement reached between the US and Iran in June. The July update was released before the latest escalation in tensions between the two countries.
With rising energy costs spilling over into fertilizers, commodity prices and global supply chains, inflationary pressures across the region are expected to remain elevated. ADB now forecasts regional inflation at 4.3 percent in 2026, compared to 3 percent in 2025 and 0.7 percentage points higher than its April projection. The inflation forecast for 2027 remains unchanged at 3.4 percent.
ADB Chief Economist Albert Park said that while Asia and the Pacific continues to demonstrate resilient economic growth, the persistent challenges arising from the Middle East conflict require policymakers to carefully balance measures to sustain growth with efforts to contain inflation.
The report also warned that renewed geopolitical tensions and prolonged instability remain among the key risks to the region’s economic outlook. Such developments could further tighten global energy markets, intensify inflationary pressures and increase external vulnerabilities.
