HANOI — Vietnam’s economy grew at its slowest pace in over a year during the first quarter of 2026, with analysts attributing the deceleration to surging energy costs and supply chain disruptions stemming from the ongoing Iran-Israel conflict. Preliminary government data showed GDP expansion cooling to 4.2% year-on-year, down from 5.1% in the previous quarter.
The manufacturing-dependent nation, which imports nearly 80% of its crude oil requirements, has faced mounting inflationary pressures as Brent crude prices spiked 34% since hostilities began in the Persian Gulf. “Vietnam’s export-oriented growth model is particularly vulnerable to energy shocks,” noted a Singapore-based economist at Maybank, speaking on condition of anonymity due to company policy.
Transport Ministry records reveal a 17% month-on-month decline in cargo throughput at major ports in March, with officials citing fuel rationing by shipping companies. The Vietnam Textile and Apparel Association reported 23 factories had temporarily suspended operations due to diesel shortages.
While State Bank of Vietnam governor Nguyen Thi Hong assured markets that “liquidity remains adequate,” analysts warn the slowdown could persist. “If oil stays above $100/barrel through Q2, we may revise our annual growth forecast below 5%,” said Standard Chartered’s Southeast Asia chief economist, pointing to Vietnam’s thin foreign exchange reserves covering just 2.8 months of imports.