[Macroeconomic Forecast Update] The Market Amid Escalating Tensions in the Middle East

The Vietnamese stock market is entering a challenging "trial by fire" phase as it faces escalating geopolitical tensions. Following a period of stable growth, the economic landscape in March 2026 is seeing new external forces emerge, forcing investors to reposition their strategies more cautiously.

First, geopolitical risks are redefining the global cost landscape. Escalating tensions in the Middle East, coupled with new U.S. tariff policies, are creating direct pressure on global supply chains and energy prices. BSC assesses that this shift is not merely temporary but may establish a "new normal" for inflation and exchange rates, requiring flexible adaptation from domestic monetary policies to safeguard growth momentum.

Second, domestic fiscal policy is becoming a key pillar supporting the economy. Amid challenges to external drivers, the government’s proactive measures through new resolutions and efforts to accelerate public investment disbursement are creating significant growth opportunities. Effectively leveraging domestic resources alongside tax and fee support policies will be key to maintaining businesses’ resilience against shocks from international markets.

Third, the FTSE upgrade roadmap is a strategy for long-term capital inflows. Although market sentiment may be temporarily affected by risk-off sentiment, key milestones in the process of upgrading to emerging market status by the end of 2026 are proceeding on schedule. This is not merely a story about foreign capital inflows but also a driving force to elevate transparency and liquidity standards, paving the way for a new, more sustainable development cycle for the Vietnamese stock market.

Based on a comprehensive analysis of conflict and policy scenarios, BSC believes that periods of high volatility are precisely when the market filters out the most valuable investment opportunities.

View detailed forecasts for the VN-Index, oil price fluctuations, and a portfolio of potential stocks in the full report: Download report

Source: BIDV Securities (BSC)