Vietnam has set a target of achieving average economic growth of at least 10% per year during 2026-2030 in order to attain high-income country status by 2045. For 2026, the economy would need to expand by nearly 12% in the second half of the year to meet this goal. The government has therefore accelerated public investment and promoted credit growth as key drivers. However, growth that relies heavily on credit is creating pressure on banks' funding sources, with outstanding loans exceeding deposits by approximately USD77 billion. As a result, Vietnam's key challenge is not simply achieving the fastest possible growth but ensuring sustainable growth without undermining economic and financial stability.
KResearch assesses the risks currently facing Vietnam's economy, with the 10% GDP growth target increasing pressure in four key areas: bank funding, the real estate market, external stability, and financial sector.
- Growing pressure on bank funding. In the first half of 2026, loans expanded by 7.4%, while deposits increased by only 5.0%. As loan growth continues to outpace deposit growth, banks are competing more aggressively for deposits, driving up funding costs and market interest rates. Nevertheless, overall liquidity in the banking system remains manageable, as the State Bank of Vietnam (SBV) can provide short-term liquidity through open market operations (OMO) and other monetary policy tools.
- Rising risks in the real estate market, particularly in Hanoi. Housing prices are increasing faster than household incomes, while new condominium supply is growing more rapidly than sales, leading to higher inventory levels. In the first half of 2026, the housing price-to-income ratio in Hanoi reached 37.7 times, indicating a significant decline in housing affordability. However, these risks are not yet evident to the same degree nationwide.
- Increasing vulnerability in external stability. Vietnam recorded a trade deficit of nearly USD17 billion in the first half of 2026, as imports grew faster than exports, increasing the risk of a current account deficit. At the same time, relatively limited foreign exchange reserves are putting additional depreciation pressure on the Vietnamese dong.
- Financial sector risks are rising but remain manageable. Vietnam's banking system reported a capital adequacy ratio (CAR) of 12.06% at the end of 2025, which remains above the regulatory minimum. In addition, authorities have introduced measures to contain risks and support liquidity.
The increasing signs of vulnerability have raised risks to Vietnam's economy. However, in the short term, these risks are still considered manageable, as the Vietnamese authorities have begun implementing measures to safeguard stability, including lowering credit growth targets and injecting liquidity through open market operations (OMO). Nevertheless, the risks have not disappeared. Particular attention should be paid to factors that could undermine confidence in the banking system, as they could amplify liquidity pressures and asset quality concerns, potentially leading to systemic risks.
Ultimately, Vietnam may need to strike a more careful balance between maintaining ambitious growth targets and preserving economic and financial stability. This could lead to a more cautious policy approach and slower economic growth than planned in the years ahead.
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