GDP growth against the prevailing wind.

The first half of 2025 witnessed a strong surge in the economy , primarily driven by expansionary fiscal and monetary policies, abundant FDI inflows, and vibrant import and export activities.

Highest economic growth in 14 years

According to the latest figures from the General Statistics Office, Vietnam's GDP in the second quarter of 2025 increased by 7.96%, second only to the peak of 8.56% in the second quarter of 2022 during the 2020-2025 period. For the first six months of the year, growth reached 7.52% – the highest level since 2011.

This figure not only surprised international observers but also went against the downward trend sweeping many major economies. The World Bank (WB) forecasts global economic growth in 2025 at only 2.3%, the United Nations (UN) 2.4%, the International Monetary Fund (IMF) 2.8%, and the Organization for Economic Cooperation and Development (OECD) 2.9% – meaning Vietnam is growing at nearly three times the global average.

First and foremost, it can be affirmed that this growth rate was achieved thanks to the impetus from proactive and flexible fiscal and monetary policies.

Vietnam's GDP growth in Q2/2025 is projected at 7.96%, second only to the peak of 8.56% in Q2/2022 during the 2020–2025 period. Photo: Hoang Ha

Fiscal and monetary wings are both expanding.

Regarding monetary policy, credit growth in the economy reached 8.30%, significantly higher than the 4.85% recorded in the same period last year. An estimated 1.3 trillion VND was injected into the market. The State Bank of Vietnam is committed to a credit growth target of 16% for the whole year and may adjust it higher if necessary.

In terms of fiscal policy, current expenditures reached VND 776 trillion, equivalent to 49.5% of the budget estimate and a 40.8% increase compared to the same period last year. Development investment expenditures reached VND 268.1 trillion, equivalent to 33.9% of the budget estimate and a 42.3% increase.

The Ministry of Finance stated that, to support growth, the budget deficit could reach 4-4.5% of GDP, higher than the projected 3.8%. Development investment spending is expected to reach 791 trillion VND, but is prepared to be adjusted to nearly 1 trillion VND. Simultaneously, support packages involving tax and fee exemptions, reductions, and deferrals totaling over 230 trillion VND will continue to be implemented.

Industrial production continues its strong recovery.

In the first six months of 2025, industrial production continued to thrive, with the industrial production index (IIP) increasing by 9.2% year-on-year – the highest level since 2020. In the same period of 2024, this index increased by 8.0%.

The main driving force came from the manufacturing sector – which increased by 11.1%, higher than the 8.9% of the same period last year. In the second quarter of 2025 alone, the industrial production index is estimated to increase by 10.3%, with manufacturing increasing by as much as 12.3%.

Many localities recorded impressive growth in the processing and manufacturing industry: Phu Tho increased by 46.6%; Nam Dinh by 33.0%; Bac Giang by 27.5%; Thai Binh by 25.3%; Ha Nam by 22.8%; Vinh Phuc by 18.8%; and Quang Ngai by 18.3%.

FDI accelerates, consolidating its position as a manufacturing hub.

Foreign direct investment (FDI) continues to be a bright spot. In the first six months of the year, Vietnam attracted $21.52 billion in registered capital, a 32.6% increase compared to the same period in 2024. Actual FDI reached $11.72 billion – the highest level in the past four years.

Vietnam is benefiting from the global supply chain shift as multinational corporations seek new destinations. Simultaneously, a series of institutional reforms, improvements to the investment environment, and the expansion of high-tech industrial parks are helping Vietnam solidify its position as Asia's manufacturing hub.

Imports and exports boomed, with a record trade surplus with the US.

Total merchandise exports and imports in the first six months of the year reached US$432.03 billion, an increase of 16.1% compared to the same period last year. Exports increased by 14.4%, imports increased by 17.9%, and the trade balance continued to show a surplus of US$7.63 billion.

In particular, the trade surplus with the US reached a record high of $62 billion (an increase of 29.1%), consolidating the US's position as Vietnam's largest export market with a turnover of $70.91 billion. Vietnam also had a trade surplus of $19 billion with the EU and $1.2 billion with Japan.

Conversely, the trade deficit with China reached $55.6 billion and with South Korea $14.6 billion – reflecting a high level of dependence on raw materials and components from these two countries.

In the context of ongoing global economic uncertainty – particularly regarding US tariff policies – will this trend continue or reverse? What will the impact be?

Those questions absolutely must be answered.

Many challenges lie ahead.

Besides external risks, Vietnam is facing a series of domestic challenges:

Disbursement of public investment remains slow, while the need for investment in infrastructure, green transformation, and digitalization is becoming increasingly urgent.

Many small and medium-sized enterprises (SMEs) still face difficulties in accessing credit and land.

Institutional reforms have not yielded breakthroughs, and the privatization of state-owned enterprises has stalled.

Especially macroeconomic risks.

According to economic experts, in order to maintain its impressive growth momentum and aim for double-digit growth from 2026 onwards, Vietnam needs a long-term development strategy.

Specifically, it is necessary to diversify export markets, reduce dependence on a few key partners; strengthen the localization of supply chains, invest in supporting industries and develop high value-added sectors, in order to minimize risks from goods that are easily subject to tariffs.

In addition, there is a need for stronger institutional reforms, unlocking private resources, and improving the efficiency of public investment.

Finally, despite high growth and expanded support policies, Vietnam needs to remain steadfast in its goal of maintaining macroeconomic stability, building confidence among domestic and foreign businesses and investors.

High growth in the first half of 2025 is a spectacular milestone in the regional and global economic landscape. However, the journey from “high growth” to “rapid and sustainable growth” is a challenging one – something not every economy achieves.

Vietnam takes the lead.

International organizations have been cautious in their forecasts for Vietnam's full-year growth, which are significantly lower than the actual figures for the first half of the year.

According to a recent World Bank report, the Philippines' growth in 2025 is projected to reach only 5.3% (down 0.4 percentage points), Indonesia 4.7% (down 0.3 percentage points), Thailand 1.8% (down 0.7 percentage points), while Vietnam is forecast at 5.8% (down 1.3 percentage points).

The IMF forecasts growth in the Philippines at 5.5%, Indonesia at 4.7%, Thailand at 1.8%, Malaysia at 4.1%, and Vietnam at 5.4% – the sharpest decline in the region (down 1.7 percentage points).

The OECD has given a higher forecast: Vietnam at 6.2% (down 0.9 percentage points), but still outperforming other Southeast Asian countries.

Despite international organizations lowering expectations, the reality of the first six months of the year shows that Vietnam is accelerating spectacularly – in contrast to the rest of the region, where many economies are stagnating or slowing down.

But those warnings are also worth considering in the nation's efforts to achieve high growth targets this year.

Vietnamnet.vn

Source: https://vietnamnet.vn/gdp-tang-nguoc-chieu-gio-2419092.html