Vietnam aims for GDP growth of 7-7.5% in 2025, bringing its economy size to 31st-33rd in the world.
With that growth rate, GDP in 2025 The projected figure is $500 billion, an increase of nearly $40 billion compared to 2024. How can we add tens of billions of dollars to the economy, and what are the main drivers of growth next year?
GDP growth above 7% is feasible.
The economic growth figures for 2025 were presented by Minister of Planning and Investment Nguyen Chi Dung when reporting to the National Assembly Standing Committee on the socio-economic development plan for 2024 and the projected socio-economic development plan for 2025. Accordingly, with efforts to achieve high growth rates this year and in 2025, the national GDP per capita could reach approximately US$4,900 by 2025.
This goal is considered achievable by many experts, provided the government maintains and implements current growth-supporting policies in a coordinated manner. Key measures include boosting public investment, supporting the development of the domestic private sector, and promoting exports to major markets such as the United States and the European Union.
Mr. Do Thien Anh Tuan, lecturer at Fulbright University Vietnam emphasizes the importance of 2025 in the context of the conclusion of the 2021-2025 socio-economic development plan. Due to the impact of the COVID-19 pandemic, GDP growth in previous years has declined. Therefore, 2025 requires maximum effort to achieve the highest possible growth to compensate for this loss.
Mr. Tuan highly appreciated the government's determination, and with domestic and international conditions projected to be more favorable in 2025, the target of achieving GDP growth of over 7% next year is entirely feasible.
However, Mr. Tuan also noted that to achieve this goal, it is necessary to continue to strongly promote the tasks and solutions that have been set out. In particular, the issue of disbursing public investment needs to be resolved because this is one of the important bottlenecks affecting economic growth.
Regarding export prospects, Mr. Tuan noted that Vietnam's export market is showing many positive signs. The US market, Vietnam's largest export market, is not at risk of a hard landing, inflation is showing signs of cooling down, and consumer purchasing power is recovering strongly.
The Fed's recent decision to lower interest rates by 0.5% is expected to create new momentum for consumer demand in the world's largest economy, thereby creating opportunities for Vietnam to boost exports in the coming year.
Where does the growth come from?
According to economist Dinh Tuan Minh, research director of the Center for Market Solutions for Socio-Economic Issues (MASSEI), Vietnam's economy currently has a high degree of openness, so its GDP growth rate in the fourth quarter of 2024 and in 2025 depends heavily on the recovery of the US economy – Vietnam's largest export market.
The good news is that the Fed has lowered interest rates, the US economy is experiencing a soft landing and continues to grow; consumer demand is increasing, and so is the demand for imported goods. This is beneficial for Vietnam's economic growth.
According to Mr. Tran Duc Anh, Director of Macroeconomics and Market Strategy at KB Securities Vietnam (KBSV), the Vietnamese economy is expected to maintain positive growth next year thanks to favorable macroeconomic conditions.
With exchange rate and domestic inflation pressures no longer a major concern, combined with the global trend of maintaining loose monetary policies, the State Bank of Vietnam will have more room to maintain low interest rates to support economic recovery.
"With low interest rates maintained, domestic consumer demand may recover better in 2025, contributing to growth. Recently, we have also launched some demand-stimulating measures such as reducing VAT. I believe this has had some effect, but the level is not attractive enough to create a breakthrough," Mr. Anh emphasized.
Experts also pointed out several other positive signs for the economy in 2025, such as the resurgence of private investment as the government has recently boosted infrastructure investment, helping to reduce business costs for enterprises.
On the other hand, consumption in 2025 is projected to increase even more strongly, supported by the high growth rate of 2024. Improved incomes will lead to increased consumption, facilitating growth.
In addition, some argue that it is necessary to continue improving the investment and business environment, reducing interest rates in the economy, and effectively implementing the Land Law to remove difficulties and obstacles for infrastructure investment projects and real estate businesses in issues related to land clearance and land access costs.
According to Mr. Tran Ngoc Bau, General Director of WiGroup, a company specializing in providing data, the main drivers of growth in 2025 will still come from FDI investment and exports. This year, one of the brightest spots in the economic picture is attracting foreign direct investment (FDI).
Total registered FDI capital in Vietnam increased significantly in the first nine months, with disbursed capital reaching its highest level in the past five years, surpassing even pre-pandemic levels. In the current export structure, the FDI sector also accounts for a large portion of the value.
"A study published in 2023 indicated that, all other factors remaining constant, a 1% increase in total private investment or FDI would boost economic growth by 0.03-0.04 percentage points," Mr. Bau added.
This expert also noted that, at least for the next few years, the FDI sector will continue to be a major driver of GDP growth. However, reducing dependence on the foreign sector will require time, a roadmap, and determination.
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