From consumption, public investment, credit, import and export, public investment to FDI attraction - every sector of the economy has bright colors, according to the General Statistics Office, in agreement with the high growth target set by the Government.
However, behind those impressive numbers are signs of risk that need to be identified to avoid macro consequences.
Loosening policies are in place
Monetary and fiscal policies have played a leading role in the recovery. System-wide credit increased by 5.6% compared to the end of 2024; 18.7% compared to the same period, showing that cash flow has been pumped out thanks to loose monetary policy. Average lending interest rates have decreased to 6.6%/year, creating room for businesses and people to expand investment and consumption.
Meanwhile, public investment was also boosted with VND222 trillion disbursed, up 17.5% year-on-year – a significant increase. In addition to the total approved capital for investment expenditure in 2025 of VND826 trillion, localities have increased capital by nearly VND74 trillion for public investment. This move shows that public investment is also expanding.
The economic picture in the first 5 months of 2025 is the result of the Government 's drastic, flexible and effective management efforts. Photo: Nam Khanh
Total retail sales of goods and consumer services revenue increased by nearly 10%, of which tourism revenue increased by 25%, reflecting a strong recovery in consumer sentiment. State budget revenue reached 58% of the annual plan, up nearly 25% over the same period, showing that production and business momentum is recovering significantly.
The index of industrial production (IIP) increased by 8.8%, with the manufacturing sector – the key driver – increasing by more than 10%. This is an indicator that production activities are restarting on a large scale, despite signs of increasing input costs (such as construction materials, electricity).
FDI and exports play leading roles
Amid concerns about US tariffs on Vietnamese goods, the foreign economy has shown strong resilience.
Newly registered, adjusted and contributed capital for share purchase reached 18.4 billion USD – a record high in 5 years – up 51% over the same period. Notably, realized capital reached 8.9 billion USD, up nearly 8%. Singapore, China and Japan continued to be the leading investors.
Imports and exports also maintained a strong growth momentum. Total turnover in the first 5 months reached nearly 356 billion USD, up 15.7%. Exports increased by 14%, imports increased by 17.5%, bringing the trade balance to a surplus of nearly 4.7 billion USD.
In the first five months of 2025, the total export turnover of goods reached more than 180 billion USD, an increase of 14% over the same period last year. Of which, the domestic economic sector reached nearly 50 billion USD, an increase of 12.5%, accounting for 27.5% of the total export turnover; the foreign-invested sector (including crude oil) reached 131 billion USD, an increase of 14.5%, accounting for 72.5%.
The United States is Vietnam's largest export market with a turnover of over 57 billion USD. China is Vietnam's largest import market with a turnover of over 69 billion USD.
In the first five months of 2025, the trade surplus with the United States reached nearly 50 billion USD, up 28.5% over the same period last year, despite the pending tariff barriers.
Trade surplus with the EU increased by more than 16 billion USD, up 16%; trade surplus with Japan by 0.9 billion USD, up 75%; trade deficit with China by 46 billion USD, up 40%; trade deficit with South Korea by 12 billion USD, up 5.7%; trade deficit with ASEAN by 6.5 billion USD, up 66%.
The above figures show that the FDI sector still holds the dominant share in the import-export pie, overwhelming the entire market share of Vietnamese enterprises. Exports to the United States continue to increase while imports from China have not slowed down.
To contribute to the implementation of commitments to narrow the trade balance gap, the Government has increased the purchase of goods from the United States, while making efforts to crack down on counterfeit, fake, and unknown origin goods nationwide. However, the opposite effect has been that many traditional markets and stores have closed in many localities.
The risks behind beautiful numbers
However, high growth does not mean absolute safety. Inflationary pressures are simmering, especially when prices of construction materials, electricity, and healthcare services are all rising. Although the CPI only increased by 3.21% in the first 5 months of the year - a seemingly positive figure calculated by the General Statistics Office - this increase does not fully reflect the real fluctuations in the market. This raises questions about the lag in price policy and the risk of inflation outbreaks in the second half of the year.
In addition, the policy of loosening interest rates to boost growth is facing pressure from exchange rates. VND has depreciated nearly 2% against USD in the past 5 months, creating a double risk: increasing import costs and negatively affecting inflation control. This balance needs to be regulated very carefully, otherwise it can easily lead to macroeconomic instability as happened during the hot growth periods more than a decade ago.
The economy’s increasing dependence on the FDI sector is becoming more and more serious. Domestic enterprises continue to be disadvantaged in the import-export chain, accounting for less than 30% of total export turnover.
Meanwhile, the number of businesses withdrawing is equivalent to the number of new joiners (both nearly 112 thousand businesses), showing that the business environment is still experiencing significant fluctuations and risks.
No growth at all costs
The government is determined to achieve the 8% growth target for this year to create momentum for double-digit growth in the coming time.
However, the forecasts of the IMF (5.2%), World Bank (5.8%) or ADB (6.6%) show that the gap between domestic expectations and the forecasts of international institutions is not small. Achieving 8% is feasible, but the price to pay is macroeconomic instability, escalating inflation or soaring public debt.
In the long term, Vietnam needs to prepare for huge infrastructure investment needs – from high-speed railways (US$70 billion), urban metros (US$170 billion), to energy (US$135 billion). This cannot be done solely on debt or FDI, but requires unlocking resources from the people, private enterprises, and domestic economic sectors. A transparent business environment, simple administrative procedures, and a stable legal system will be key factors in unlocking resources from the people.
The economic picture in the first 5 months of 2025 is the result of the Government's drastic, flexible and effective management efforts.
However, to maintain the recovery momentum and realize the 8% growth target, the Government needs to continue to be cautious in policy coordination, enhance the endogenous capacity of domestic enterprises and build a truly favorable business ecosystem.
That is the sustainable path for an economy that wants to aim for double-digit growth in the near future.
Source: https://vietnamnet.vn/kinh-te-5-thang-dau-nam-va-ky-vong-tang-truong-8-2409414.html
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