DBS Group Research expects Vietnam’s real GDP to rise 7.8% year-on-year in Q2 2026, unchanged from the 7.8% pace in Q1. The call rests on strong electronics manufacturing and shipments linked to AI-led technology demand, alongside supportive FDI and resilient retail spending, even as the Middle East conflict and high base effects weigh on comparisons.
Headline inflation is projected to slip to 5.0% year-on-year in June 2026, easing from 5.6% in May, as transport costs cool with lower global and domestic energy price pressures. With food and housing viewed as sticky, the moderation in CPI would still leave policymakers scope to keep the central bank’s refinancing rate steady, aided by a stable currency, despite hawkish US Fed expectations and reports of de-escalation in Middle East tensions after a US-Iran interim peace deal.
Vietnamese Equities and FDI-Driven Economic Strength
We see the forecast for 7.8% GDP growth and easing inflation as a clear signal to maintain a bullish stance on Vietnamese equities in the coming weeks. The VN30 Index, which has already seen a strong rally of over 15% in the first half of 2026, remains our primary focus for expressing this view. This economic strength is underpinned by record foreign direct investment, with disbursed capital reaching an estimated $12 billion year-to-date.
Positioning for Electronics and Currency Stability
Given the specific mention of AI-driven demand and strong electronics manufacturing, we are favoring long positions in technology-related futures and call options. Electronics exports have been a major contributor to growth, expanding by an estimated 18% year-on-year in the second quarter. This targeted approach allows us to capitalize on the most powerful drivers of the current economic cycle.
The central bank’s ability to hold its refinancing rate steady provides a stable backdrop for the currency. We anticipate the Vietnamese Dong will remain resilient against the US dollar, a notable strength considering expectations of a hawkish Federal Reserve. This stability, which contrasts with the volatility seen in past Fed tightening cycles, reduces currency risk for our equity positions.
While the headline inflation is expected to moderate to 5.0%, we are mindful that sticky food and housing costs present a risk. We are using options to manage this, as implied volatility on the VN30 remains relatively low compared to historical averages. This makes buying protective put options a cost-effective strategy to hedge against any unexpected policy shifts.
