Vietnam’s economy has started this year ‘on an unexpected trajectory’, according to the Chief Economist at VinaCapital, despite a predicted ‘deceleration in tourism arrival growth’.
According to the group’s Chief Economist Michael Kokalari, the tourism growth slowdown ‘is playing out in line with our expectations’, as tourism surged in 2025, ‘especially from China’.
In the first two months of the year, the economist notes that arrival growth has decelerated ‘from 21 percent to 18 percent’.
Vietnam in 2025 saw its best international tourism year, welcoming nearly 21.17 million visitors, up by 20.4 percent yearly, despite missing its target of 23-25 million foreign visitors.
China was the primary source market, contributing 5.28 million visitors, a yearly rise of 41.3 percent and amounting to roughly 91 percent of the figure registered in 2019.
South Korean visitation to the country also boomed in 2025, reaching 4.33 million. And that wave is continuing: South Korean visitor numbers in January and February totaled 971,000, up by about 10 percent yearly, outpacing Chinese arrivals which totaled 923,000.
In the first two months of the year, Vietnam welcomed 4.68 million foreign visitors, an 18.1 percent yearly uptick. February alone saw 2.2 million international visitors, the third consecutive month of over 2 million foreign visits.
But the country could be in for a shock, as the surge in oil prices due to the Middle East conflict is expected to not only increase travel prices, but also boost inflation from 3.4 percent yearly growth in February ‘to over 5 percent in March and April’, notes Koklari.
The economist opines that there are currently ‘limited options to boost growth’, with the only realistic way to improve GDP figures ‘by taking aggressive measures to boost consumption and/or the real estate market’.
The government is targeting 10 percent GDP growth in 2026, with a 9 percent growth target for the first quarter. The VinaCapital economist predicts this will be closer to 6.5 percent in 1Q26, noting how consumption makes up over 60 percent of GDP and manufacturing takes up 25 percent.
The government already ‘took actions to boost consumer sentiment and spending’ last year, including a personal income tax break and a slight VAT reduction, but Kokalari argues that ‘more aggressive measures’ will be needed.
