This growth, which makes Vietnam one of the strongest economies in the south-Pacific region, is driven by progressive political reform; the development of Vietnam Electronic Digital Identification system which will provide a secure, biometric-linked replacement for physical documents; and the country’s ambition to become a regional powerhouse by 2030.
These factors in addition to the prospect of a CCP and the ongoing flow of Foreign Direct Investment into Vietnam are all raising the prospect of an MSCI upgrade before the end of 2028.
Over 2025, Vietnam’s economy delivered a strong performance, with GDP growth of about 8%, a budget surplus of nearly $10 billion, while inflation kept stayed at 3.5%. Retail services and manufacturing both expanded by 9.2%, while disbursed FDI climbed to $27.6 billion.
Looking to this year, Dragon Capital says Vietnamese corporate earnings will grow by around 19%, bringing market valuations back to average levels and creating an attractive environment for long-term accumulation.
Tung Dang, Chief Economist at Dragon Capital, said: “Vietnam has already received an upgrade from frontier to emerging market status from FTSE Russell and is now on course to receive the same from MSCI. Vietnam is more than proving its worth as one of the strongest performing economies in South-Asia and is on track to deliver growth of above 9% this year. With continued positive reform from the Vietnamese government and with more companies choosing Vietnam as a location for burgeoning operations, we see the country going from strength to strength.
“An upgrade to emerging Market is expected to catalyse a new phase of market acceleration in Vietnam underpinned by a significant pipeline of IPOs totalling more than USD 50 billion over 2026–2028.
“We estimate that around $500–$600 million of inflows from FTSE EM index-tracking ETFs and funds at minimum can be expected from the FTSE upgrade, and there could be aggregate active inflows of between $2.5–$7.5 billion from this.
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