<div id="readability-page-1">Yun Liu, senior ASEAN economist at HSBC Global Investment Research, told VnEpxress International: &#34;Trade continues to boom, driven by the strong performance in electronics sector. Services also have flourished, led by improving private consumption and increasing tourists.&#34;Q1 growth this year has been the highest in 16 years, as trade rose 23% to US$249.5 billion, according to the General Statistics Office.Strong consumer demand during the Lunar New Year and a record 6.76 million foreign tourist arrivals bolstered growth of 8.18% in the services sector.But the Middle East conflict between the U.S., Israel and Iran, which began at the end of February, threatens to undermine Vietnam’s efforts to achieve 10% growth this year.<table><tbody><tr><td><img src="https://imageproxy.pbkrs.com/https://vcdn1-english.vnecdn.net/2026/04/20/CG2A7306-1776654835-6900-1776654876.jpg/query-ZHByPTEmZml0PWNyb3AmaD0wJnE9MTAwJnM9dDBSZHIxYWdLVllmb0JkVUQwMDI2ZyZ3PTY4MA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="680" height="453" original-src="https://imageproxy.pbkrs.com/https://vcdn1-english.vnecdn.net/2026/04/20/CG2A7306-1776654835-6900-1776654876.jpg/query-ZHByPTEmZml0PWNyb3AmaD0wJnE9MTAwJnM9dDBSZHIxYWdLVllmb0JkVUQwMDI2ZyZ3PTY4MA"/></td> </tr><tr><td> An employee refills a vehicle at a fuel station in HCMC. Photo by VnExpress/Quynh Tran </td> </tr></tbody></table>The price of the country’s most popular fuel, RON95, is up almost 26%, putting pressure on the government to control inflation.&#34;The biggest downside risk to growth is energy prices staying higher for longer,&#34; Liu warned.&#34;As Vietnam is so dependent on both crude oil and gas imports from the Middle East as well as sensitive to commodity price swings, this may ultimately pose a significant downside risk to global trade and household demand.&#34;The government has made efforts to stabilize the fuel market, allocating VND8 trillion (US$304 million) as an advance to the fuel subsidy fund. Lawmakers have also waived environmental protection tax, value-added tax and special consumption tax on fuel between April 16 and June 30. These waivers are expected to cost the government VND7.3 trillion a month.It has increased the nation’s fuel reserves from 15 to 26 days’ requirements. In the long run the government aims to establish a reserve of at least 90 days’ worth of net imports by 2030.Short-term supply is guaranteed since the country’s two refineries, at Dung Quat and Nghi Son, have sufficient crude stocks to maintain production through April, Minister of Industry and Trade Le Manh Hung said recently.But Liu said further investment in the energy sector is needed to ensure sustainable economic growth.&#34;It is necessary to use some fiscal support to cushion the impact for households and businesses, but in the long term, Vietnam needs a strategy for energy security and energy transformation.&#34;</div>

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HSBC reports Vietnam's Q1 growth at 7.8%, the highest in 16 years, driven by strong trade and services. However, high energy prices due to the Middle East conflict pose a risk to economic expansion. The government is taking measures to stabilize fuel prices, including tax waivers and increasing fuel reserves. HSBC emphasizes the need for further investment in the energy sector for sustainable growth and suggests fiscal support to mitigate impacts on households and businesses.

- Vietnam's trade and services sectors have shown significant growth, with Q1 growth at its highest in 16 years, driven by a 23% increase in trade and strong consumer demand.  
- However, ongoing conflicts in the Middle East pose risks to this growth, particularly through rising energy prices, which could impact both global trade and household demand.  
- The Vietnamese government is taking actions to stabilize fuel prices while emphasizing the need for investments in the energy sector to ensure long-term economic sustainability.

Q1 growth lays strong foundation, but high energy prices a threat: HSBC