Vietnam's economy expanded by 7.8% in the first quarter of 2026 on an annualized basis, surpassing the same period in 2025 but falling short of the government's 10% GDP growth target and slowing from the previous quarter. This shortfall is attributed to the global energy crisis triggered by the Iran war, which has disrupted oil supplies, increased input costs for manufacturers, and driven March inflation to a five-year high in Vietnam [1]. The manufacturing sector, a key growth driver, faces mounting challenges as rising oil prices threaten profit margins and export competitiveness. In response, the Vietnamese government has implemented aggressive policy measures, including the removal of gasoline taxes, which led to a 19% drop in gasoline prices, and is considering further interventions such as additional tax reductions [1].
Market analysts warn that if the Iran war persists, it could continue to suppress growth and intensify inflationary pressures in Vietnam. Technical indicators suggest limited upside for manufacturing stocks, with support levels for major indices at risk if oil prices climb further. Economists are revising forecasts, with some projecting that ASEAN+3 growth could hit a four-year low if the conflict drags on [1].
Echoing these concerns, Dong He, chief economist at the ASEAN+3 Macroeconomic Research Office (AMRO), stated that the balance of risks to the regional outlook is 'tilted to the downside.' AMRO projects that economic growth in the ASEAN+3 bloc—which includes ASEAN, China, Japan, and South Korea—could fall to its weakest level since 2022 if the Iran war continues. While Southeast Asian economies have some insulation from direct energy shocks, the region's dependence on oil and gas imports leaves it vulnerable to prolonged disruptions, which could dampen industrial production, raise inflation, and undermine confidence [2].
AMRO highlights that China, Japan, and Korea are particularly at risk due to their higher reliance on Middle Eastern energy imports and recommends that these countries strengthen energy security and diversify supply sources. The organization urges regional governments to consider fiscal and monetary measures to cushion against external shocks and to coordinate responses to emerging risks. Market sentiment remains cautious, with analysts closely monitoring oil price movements and warning that continued conflict could test resistance levels for oil prices, impacting trade balances and inflation targets across Asia [2].
Both sources emphasize the need for vigilance and proactive policy responses, including investment in alternative energy sources such as solar power, to reduce dependency on volatile oil markets [1][2].
CONCLUSION
The Iran war has triggered a global energy crisis, undermining Vietnam's growth ambitions and threatening to push ASEAN+3 economic expansion to a four-year low. Policymakers across the region are urged to implement fiscal and monetary measures, strengthen energy security, and diversify supply sources to mitigate the risks posed by ongoing instability in the Middle East.