Vietnam aims for GDP growth of 7 - 7.5% in 2025, bringing the size of the economy to 31 - 33 in the world.
With that growth rate, GDP in 2025 estimated to reach 500 billion USD, an increase of nearly 40 billion USD compared to 2024. How to add tens of billions of USD to the economy, and what are the main drivers for growth next year?
GDP growth above 7% is possible
The economic growth figure for 2025 was given 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 expected socio-economic development plan for 2025. Accordingly, with efforts to achieve high growth rates this year and in 2025, the country's GDP per capita could reach about 4,900 USD in 2025.
This goal is considered feasible by many experts, provided that the Government maintains and synchronously implements current growth support policies. Key measures include boosting public investment, supporting the development of the domestic private sector, and promoting exports to major markets such as the US and the European Union.
Mr. Do Thien Anh Tuan, lecturer at Fulbright University Vietnam, emphasized the importance of 2025 in the context of the end of the 2021-2025 socio-economic development plan. Due to the impact of the COVID-19 pandemic, GDP growth in previous years has decreased. Therefore, 2025 requires maximum efforts to achieve the highest possible growth to compensate.
Mr. Tuan highly appreciated the Government's determination, along with domestic and international conditions in 2025 that are forecast to be more favorable, so the target of GDP growth of over 7% next year is completely 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 public investment disbursement needs to be resolved because this is one of the important bottlenecks affecting economic growth.
Regarding export prospects, Mr. Tuan commented 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 cut 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 next year.
Where is the growth engine?
According to economist Dinh Tuan Minh - research director of the Center for Market Solutions for Socio-Economic Issues (MASSEI), the economy is currently very open, so Vietnam's GDP growth rate in the fourth quarter of 2024 and 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 making a soft landing and continuing to grow; consumer demand is increasing, and the demand for imported goods is increasing. This is beneficial for Vietnam's economic growth.
According to Mr. Tran Duc Anh - director of macro and market strategy of KB Securities Vietnam (KBSV), Vietnam's economy is expected to maintain positive growth next year thanks to favorable macroeconomic conditions.
With domestic inflation and exchange rate pressures no longer a concern, combined with the trend of maintaining easing policies by central banks around the world, the State Bank will have more room to maintain low interest rates to support economic recovery.
"When low interest rates are maintained, domestic consumption demand may recover better by 2025, contributing to boosting growth. Recently, we have also launched a number of stimulus solutions such as reducing VAT. I think it is somewhat effective, but this level is not attractive enough to create a breakthrough," Mr. Anh emphasized.
Experts also pointed out many other positive signals of the economy in 2025 such as the rise 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 forecast to increase more strongly because it is supported by the high growth rate in 2024. As people's income improves, consumption will increase further, facilitating growth.
Besides, there are opinions that it is necessary to continue improving the business investment environment, reducing interest rates in the economy, effectively implementing the Land Law to remove difficulties and obstacles for infrastructure investment projects and real estate business in terms of site clearance and land access costs.
According to Mr. Tran Ngoc Bau - General Director of data provider WiGroup, the main growth driver 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 in the first nine months increased sharply, the highest disbursed capital in the past 5 years, surpassing the period before the pandemic. In the current export structure, the FDI sector also accounts for the majority of the value.
"A study published in 2023 showed that, assuming other factors remain unchanged, a 1% increase in total private investment or FDI investment will boost economic growth by 0.03 - 0.04 percentage points," Mr. Bau added.
This person also commented that at least in the next few years, the important pillar promoting GDP growth will still have a large contribution from the FDI sector. If we want growth to gradually reduce its dependence on the foreign sector, it also needs time, a roadmap, and determination.
Source
Comment (0)