Ho Chi Minh City economy grows 8.27% in Q1 2026, the highest in five years

Ho Chi Minh City’s GRDP in the first quarter (Q1) is estimated to grow 8.27% year-on-year, the highest rate in five years, according to the Ho Chi Minh City Statistics Office. Excluding oil and gas, GRDP is estimated to increase by 8.58% year-on-year. The city’s statistics office said this is the strongest first-quarter growth in more than five years and provides a foundation for accelerating economic expansion in the remaining quarters of 2026.

Services lead growth, industry lags expectations

The services sector remains the main growth engine, expanding 8.91% and accounting for 51.9% of GRDP, while contributing 56% to total GRDP growth.

Industry and construction rose 7.73%, accounting for 35.2% of GRDP but contributing only 32.6% to growth. Construction activity increased 8.05%, contributing 2.2% to the overall increase. The statistics office noted that both sectors did not meet expectations.

Production improves, but input costs pressure firms

Industrial production in several key sectors improved, but input costs rose—particularly due to fluctuations in fuel prices—creating pressure for enterprises. Several major projects and construction works underway have started to generate spillover effects, though their contribution remains below the momentum of investment-driven growth.

Economic structure and growth contributions

In terms of economic structure, agriculture, forestry and fishery accounted for 1.5%; industry and construction accounted for 35.2%; and services accounted for 51.9%. The remainder consists of product taxes minus subsidies.

Business formation and foreign investment strengthen

A bright spot is the business environment. More than 13,600 new enterprises were established in the period, up 46.7%. Registered capital was near 91.4 trillion VND, up 46.6%. The city also attracted nearly $2.9 billion in foreign direct investment (FDI), up 219.7% year-on-year.

Q2 outlook from manufacturers

Looking ahead to Q2, a survey of manufacturing firms shows 77% of respondents view conditions as stable or more favorable. Some sectors are forecast to be positive, including food processing, textiles, electronics and electrical equipment. However, 22.9% expect more difficulties.

Policy focus for 2026 and near-term risks

Ho Chi Minh City targets GRDP growth of over 10% in 2026. Given that the city’s economy is highly open and exposed to fluctuations in international trade, the statistics office said energy price movements need to be monitored so policies can be adjusted in time to support businesses in maintaining production and operations.

On the domestic market, the city plans to stimulate consumption, improve the effectiveness of market stabilization programs, and expand promotions and organize trade and service events to attract residents and visitors.

It also aims to accelerate public investment progress and disbursement, focusing on key infrastructure projects to create spillover effects, attract social investment, and spur growth. As of March 23, total disbursed public investment reached over 13.5 trillion VND, equal to 9.2% of the Prime Minister’s allocated plan.

FDI momentum and external scenario

FDI into Ho Chi Minh City rose by more than 200% year-on-year. Foreign direct investment in Q1 reached nearly $2.9 billion, up more than 200% year-on-year.

The Institute for Development Research of Ho Chi Minh City also outlined three growth scenarios amid the Middle East conflict, forecasting first-quarter growth around 7-10% depending on how the conflict evolves.