Macroeconomy

• The Index of Industrial Production (IIP) maintained positive growth in December 2025, reaching 2.2% MoM and 10.1% YoY. For the full-year 2025, the IIP grew by 9.2% YoY. The manufacturing PMI remained above 50 points for the 6th consecutive month, reaching 53 points in the final month of the year. Driven by optimistic business sentiment in manufacturing and a low base effect, the IIP is projected to see robust growth in January 2026;
• Total retail sales of goods and consumer services in December 2025 are estimated at VND627.85 trillion, a year-on-year increase of 9.8%. Of this total, retail sales of goods continued to dominate (75.55%), growing by 8.6% YoY, marking a month of recovery following a two-month slowdown caused by severe natural disasters. Total retail sales growth rebounded in December as the effects of natural disasters and flooding faded, particularly within the Retail goods group. Driven by the upcoming Lunar New Year shopping peak, January retail sales are projected to maintain the month-on-month recovery trend, potentially surpassing 10% YoY;
• Regarding public investment, the State budget investment in December reached VND111,538 billion, up 11.31% MoM and 29.13% YoY. The 12-month accumulated disbursed value reached VND850.7 billion, achieving 83% of the annual target, up 26.6% YoY. For 2026, the Prime Minister has assigned a total public investment capital of 995.4 trillion, increasing by 10% from the 2025 plan and 20% from the 2025 actual disbursement;
• The CPI rose by 3.48% YoY in December, bringing the average full-year growth to 3.31%. In the first month of 2026, inflation pressure is primarily driven by food items due to the upcoming Tet peak demand and a sharp narrowing in the YoY price drop for pork (early January saw a decline of only 2% compared to 17-18% in late 2025). Conversely, stable rice and fuel prices are expected to anchor the CPI. We project a January CPI growth of 3.5% to 3.7% YoY;
• As of December 31, 2025, the VND had depreciated 3.09% against the USD, narrowing from a 3.7% depreciation at mid-year. Historically, the VND tends to appreciate in January, supported by an abundant supply of foreign currency. As of January 9, the VND has already strengthened 0.13% YTD. We expect the VND to gain another 0.1-0.5% in the month preceding Tet.

Stock market

• The stock market continued to gain in December, supported by blue-chip performance and the market’s adaptation to the rising deposit rates.
• VnIndex surged 5.5% in December, ending the year at an impressive growth rate of 40.87%. However, the rally lacks broad participation, with gains mostly limited to a select group of heavyweights.
• The average trading value in December reached VND25,851.57 bn, up marginally by 2.12% month-on-month, yet remaining consistent with the sluggish liquidity levels characteristic of early 2025. Market liquidity is largely centered on blue-chip stocks within the Banking, Real Estate, and Financial Services industries. Higher deposit rates and sharp market divergence are discouraging investors and stalling cash flow due to the difficulty of finding profitable trades.
• Foreign investors returned to slight net buying in December.
• VNIndex is likely to sustain the uptrend in January, driving by large-cap stocks, impetus from state economic development and state divestment. However, setting new highs without a breakthrough in cash flow will trigger intense volatility, leading to sharp divergence between stock groups in January.