The Index of Industrial Production (IIP) rose 7.8% year-on-year

Vietnam’s Index of Industrial Production (IIP) in the first quarter of 2025 rose 7.8% year-on-year, according to the National Statistics Office (NSO).

The manufacturing and processing sector jumped 9.5% year-on-year, electricity production and distribution increased by 4.6%, and water supply and sewerage and waste management and remediation activities surged 11.6% while mining dropped 4.7%.

Among the total 63 centrally - run cities and province, 59 recorded an increase in the IIP during the period, while 4 recorded declines.

Some localities have seen a fairly high increase in the IIP due to a sharp increase in the processing and manufacturing industry, including Phu Tho (44%), Bac Kan (31.8%), Bac Giang (27.2%), and Nam Dinh (23.5%).

The NSO also reported that the number of workers working in industrial enterprises as of March 1, 2025, increased by 1.1% compared to the same time last month and by 4.8% compared to the same time last year.

 

-Huyền Vy

Vietnam's government is serious about taking proactive steps to demonstrate a real commitment to addressing the trade imbalance while solving burdens and barriers faced by American companies and investors, according to an AmCham representative.

In his recent interview with the Vietnam Government Portal (VGP), Executive Director of the American Chamber of Commerce (AmCham) in Hanoi Adam Sitkoff voiced his support the removal of all trade barriers between Vietnam and the United States.

Mr. Sitkoff said that Vietnam's government is serious about taking proactive steps to demonstrate a real commitment to addressing the trade imbalance while solving burdens and barriers faced by American companies and investors.

Vietnam recently reduced tariffs on thirteen product categories that directly benefit U.S. exporters, he explained, adding that the leadership in Vietnam has also pledged to facilitate the purchase of more American products.

"I support the removal of all trade barriers between our two nations and believe that by opening its market to more U.S. goods and services, Vietnam can help to rectify the trade imbalance between the two countries in a manner that benefits both countries,"  the AmCham representative said.

Vietnam has developed into one of America's fastest growing export markets and as the middle class in the country grows, there are great opportunities for U.S. agriculture, aircraft, energy, equipment, medicines, technology, and many other sectors that create wealth and jobs in the United States. There is so much to gain from a strong bilateral commercial relationship, according to Mr. Sitkoff.

Regarding the U.S. Administration's imposition of reciprocal tariff on Vietnam, he shared: "I am disappointed by the U.S. President's decision to impose a 46 per cent tariff on U.S. imports from Vietnam."

He expressed his belief that lower tariffs for products coming into Vietnam, and for products reaching the American consumer is what will help U.S. companies, the economy, and consumers. Higher tariffs will not.

AmCham's leaders met with Deputy Prime Minister Ho Duc Phoc before his trip to the US. AmCham and the Viet Nam Chamber of Commerce and Industry (VCCI) sent a joint letter of concern to the U.S. Secretary of Commerce asking for a delay in the tariff implementation.

AmCham has held discussions with many U.S. businesses, and have also reached out to other major exporters such as Korean companies operating in Vietnam.

"We will continue both formal and informal engagement with the U.S. government and do our best to mitigate the impact of the new U.S. policy on trade and investment here,” Mr. Sitkoff said.

As soon as the tariffs were announced, Vietnam's government took action by convening discussions to assess the impact of the new policy, as well as reaching out to the Trump Administration to seek an implementation delay of the tariffs.

Mr. Sitkoff hailed Party General Secretary To Lam's phone conversation with President Trump, which is useful.

He suggested Vietnam improve market access for U.S. products and make doing business easier for U.S. investors in the country.

"I very much hope to see the two governments create a constructive program to help reduce the U.S.'s trade deficit with Vietnam in a way that boosts living standards and creates prosperity in both countries,” the AmCham representative said.

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The pharmaceutical market value has increased significantly, from $2.7 billion in 2015 to $7 billion in 2025.

Vietnam's pharmaceutical industry is experiencing double-digit annual growth, with its market size projected to reach $10 billion by 2026.

Leveraging open policies and significant consumer potential, Vietnam is gradually emerging as a regional hub for pharmaceutical manufacturing and research.

The pharmaceutical market value has increased significantly, from $2.7 billion in 2015 to $7 billion in 2025. The country is home to over 238 drug manufacturing facilities meeting WHO-GMP standards, 17 facilities meeting EU-GMP standards, more than 5,000 pharmaceutical wholesalers, and over 62,000 retailers.

According to Vietnam Customs, pharmaceutical imports in 2024 totaled nearly $4.4 billion, marking a 27.9% increase compared to 2023. Major suppliers include France, the US, Germany, and India.

With a population of over 100 million and robust growth in healthcare spending (an 8.7-fold increase over the past 30 years), Vietnam has attracted the attention of international pharmaceutical corporations. Experts anticipate strong investment due to the country’s high-quality human resources, upgraded infrastructure, and transparent policies.

The National Strategy for the Development of Vietnam's Pharmaceutical Industry until 2030 and Vision to 2045 aims to elevate the industry to the level of advanced countries in the region. It focuses on ensuring affordable access to medicines, enhancing research capabilities, and applying technologies to produce originator drugs and modern dosage forms.

Vietnam also seeks to position itself as a contract manufacturing hub and a center for technology transfers of originator drugs within ASEAN, aiming to achieve Level 4 classification under the WHO standards.

Furthermore, the EU-Vietnam Free Trade Agreement (EVFTA) is generating significant benefits for European pharmaceutical companies, with 51% of EU pharmaceuticals now tariff-free. This advantage facilitates entry into Vietnam's market, including public hospitals, which account for 65% of the industry's revenue.

-Minh Huy

PM Pham Minh Chinh made the suggestion on April 7 night, saying that Vietnam is ready to negotiate with the U.S. for a mutually beneficial agreement.

At a meeting with relevant ministries and government agencies on April 7 night to seek more solutions in response to 46 per cent reciprocal tariff the U.S. has announced to impose on Vietnam, Prime Minister Pham Minh Chinh suggested the U.S. Administration delay the implementation of its new tariff policy for at least 45 days for bilateral negotiations.

Vietnam is ready to negotiate with the U.S. side to reach a bilateral agreement that benefits the two countries, continues to increase imports from the U.S., including products related to defense and security, and promotes the early aircraft delivery to the former, the PM was quoted by the Government News as saying.

Vietnam will review and fully and effectively resolve the issues concerned by the U.S. side; well handle issues related to monetary policy in line with Vietnamese law and international practices to stabilize interest and exchange rates in accordance with the Vietnamese economy, the PM added.

For non-tariff issues, the Prime Minister assigned ministries and agencies to study and provide satisfactory feedbacks to the U.S. side.

He tasked the Ministry of Industry and Trade to review and strictly control the origin of goods.

He also tasked the Ministry of Science and Technology to review legal regulations on copyright and intellectual property issues and effectively organize the implementation of these regulations to protect the legitimate rights and interests of entities.

-Vân Nguyễn

Total reigistered capital reaching nearly VND356.8 trillion ($13.7 billion).

Around 36,400 new enterprises were established in the first quarter of 2025 with total registered capital of nearly VND356.8 trillion ($13.7 billion), figures from the National Statistics Office show.

The figures represent a year-on-year reduction of 4% in the number of businesses and an increase of 1.3% in registered capital.

In March alone, there were more than 15,600 newly-established enterprises with total registered capital of over VND126.3 trillion ($4.8 billion).

The three-month period saw more than 36,500 enterprises resuming their operations, skyrocketing 54.8% year-on-year.

Meanwhile, a total of 61,400 enterprises registered for a temporary suspension of operations in the first quarter, rising 15.1% year-on-year; nearly 11,500 firms ceased operations while waiting to complete dissolution procedures, down 26.1%; and nearly 5,900 enterprises were dissolved, up 23%.

 

 

-Anh Nhi

The 2024 PAR Index maintained its positive growth trend, achieving an all-time high average score of 88.37%, a 1.39% increase from 2023.

The 2024 Public Administration Reform Index (PAR Index) recorded significant advancements, with the average score exceeding 88% – the highest level in its history – and all 63 localities surpassing the 80% benchmark.

Hai Phong emerged as the national leader in administrative reform for the second time.

Minister of Home Affairs Pham Thi Thanh Tra presented the results and rankings of the 2024 PAR Index for the People's Committees of provinces and centrally-run cities during the regular Government meeting on March 6.

Minister Tra noted that the 2024 PAR Index maintained its positive growth trend, achieving an all-time high average score of 88.37%, a 1.39% increase from 2023. Notably, this marks the second consecutive year where all localities achieved scores above 80%.

The report highlighted the top five localities in the Satisfaction Index of Public Administrative Services (SIPAS) 2024, including Hai Phong city, and the provinces of Thai Nguyen, Hai Duong, Quang Ninh and Ba Ria - Vung Tau. Meanwhile, such provinces as Bac Kan, Lang Son, Quang Nam, An Giang, and  Quang Ngai, ranked lowest in the SIPAS rankings.

Hai Phong city secured the top position in the 2024 PAR Index with a remarkable score of 96.17%, reflecting a 4.30% improvement and a rise of one rank compared to 2023. This marks the second time the northern port city has led the nation, after the first in 2021.

As a result, the top five in the 2024 PAR Index including Hai Phong city (96.17%), Ba Ria - Vung Tau province (93.35%), Hanoi (92.75%), Quang Ninh province (91.49%), and Thai Nguyen province (91.47%).

At the other end of the spectrum, the northern mountainous province of Cao Bang ranked last in the 2024 PAR Index, achieving a score of 82.95%.

-Thi Nguyễn

The southern city will establish an environment conducive to controlled testing by providing space, infrastructure, and support facilities for UAV testing.

Ho Chi Minh City (HCMC) has launched a plan to facilitate the controlled testing of new technology solutions, including unmanned aerial vehicles (UAVs or drones) and autonomous vehicles, within its High-Tech Park and Concentrated Information Technology (IT) Zones.

As part of the initiative, relevant departments, agencies, and units will enhance communication about the policy for controlled testing in these designated zones.

Training sessions will be organized for organizations, businesses, and individuals involved in research and development (RD), and the application of UAVs and autonomous vehicles.

Additionally, the city will establish an environment conducive to controlled testing by providing space, infrastructure, and support facilities for UAV testing.

Controlled testing of UAVs and autonomous vehicles will proceed with assistance provided to participating organizations. The HCMC High-Tech Park Management Board will oversee the testing process, coordinating with relevant agencies and units to ensure compliance with regulations. This supervision aims to safeguard safety, security, public order, and the interests of all stakeholders within managed areas.

The City People's Committee has designated Quang Trung Software City Development Company Limited (QTSC) and the High-Tech Park Management Board as the primary contact points for organizations seeking support in obtaining permits and licenses related to the controlled testing process, particularly those under the City's licensing authority.

-Thi Nguyễn

The growth driven by increase in consumption demand during Tet and holidays in the early year.

The total revenue from retail sales of consumer products and services in the first quarter of the year reached over VND1.7 quadrillion ($65.4 billion), a year-on-year increase of 9.9%, figures from the National Statistics Office show.

The retail sales of products amounted to over VND1.31 quadrillion ($50.4 billion), accounting for 76.8% of the total value and jumping 8.8% compared to the same period last year. That of food and foodstuffs surged 10.1%, household appliances and tools 6.3%, garment 6.9%, and cultural and educational products 13.3%.

In March alone, the revenue was estimated at VND570.9 trillion ($22 billion), up 10.8% year-on-year.

The retail sale increase was attributed to high consumption demand during the Tet (Lunar New Year) festival and holidays in the early year, according to the office. A rise in the number of foreign tourists to Vietnam also contributed to the growth of the trade and service sector.

 

-Vũ Khuê

A letter from VCCI and AmCham expressed deep concern about President Trump’s reciprocal tariff announcement.

The Viet Nam Chamber of Commerce and Industry (VCCI) and the American Chamber of Commerce in Hanoi (AmCham) sent a letter to the United States Secretary of Commerce on March 5, urging the Trump Administration to delay implementation of reciprocal tariffs on Vietnam’s exports to the US to avoid disrupting operations and undermining prior commercial decisions and shipment logistics, according to a report from the Government News.

VCCI and AmCham believe that the Government of Vietnam is serious about taking proactive steps to demonstrate a real commitment to addressing the trade imbalance with the U.S. while solving burdens and barriers faced by American companies and investors.

The two organizations, which represent the business communities of both countries, also encouraged both governments to engage in dialogue to create a constructive program to help reduce America's trade deficit with Viet Nam in a way that boosts living standards and creates prosperity in both countries.

The letter, signed by the leaders of both organizations, expressed deep concern about President Trump’s reciprocal tariff announcement and stated that, if implemented, the shockingly high new tariffs will negatively affect our members' businesses and customers, and the broader commercial relationship between our two countries. “Lower tariffs for products coming into Vietnam, and for products reaching the American consumer is what will help U.S. companies, the economy, and consumers. Higher tariffs will not.”

The letter explained that Vietnam reduced tariffs on thirteen product categories last week that directly benefit U.S. exporters.

Vietnamese leaders have also pledged to facilitate the purchase of more American products, and the two business organizations continue working with government authorities on resolving burdens including restrictions and inconsistent regulations for digital trade and broadcast, pharmaceutical imports, intellectual property rights, customs and tax procedures, procurement, data management and security, and more.

The letter said that Vietnam has developed into one of America’s fastest growing export markets and as the middle class here grows, there are great opportunities for U.S. agriculture, aircraft, energy, equipment, medicines, technology, and many other sectors that create wealth and jobs in America’s heartland. The letter noted that the Vietnamese and American economies are complementary rather than directly competitive.

The two organizations told the Commerce Secretary that they support the agreement proposed by Party General Secretary To Lam in his phone conversation with President Donald Trump on April 4  to remove tariffs and other trade barriers between the two nations.

A fast and fair agreement would add certainty for businesses and would help to rectify the trade imbalance between the two countries in a manner that benefits both countries, the letter noted.

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Representatives of over businesses from the northern port city have made a working visit to South Korea to seek cooperation opportunities.

Over 30 Hai Phong businesses recently concluded a productive working visit to South Korea, securing numerous agreements on investment cooperation, trade promotion, and human resource training.

The delegation, comprising representatives from sectors such as banking, mechanical engineering, commerce, media, and tourism, engaged in a series of activities including meetings, signing cooperation agreements, and conducting market surveys across various locations in South Korea.

South Korea is currently Hai Phong's largest foreign investment partner in terms of total investment capital, with $14.1 billion, and ranks second in the number of active FDI projects. The presence of major corporations such as LG and SK in its key industrial zones  has paved the way for Hai Phong to attract additional waves of investment, particularly from small and medium-sized enterprises (SMEs).

During the visit, the delegation signed a Memorandum of Understanding (MoU) with the Seoul City Veterans Association,with an aim to connect Vietnamese workers, especially university graduates, with the South Korean market, while also establishing skills training centers to create a high-quality workforce for both sides.

The delegation also signed a cooperation agreement with the Wonju Branch of the Korean Women Entrepreneurs Association, focusing on supporting import/export activities, promoting products, and expanding bilateral distribution channels for their members.

In addition to formal agreements, the delegation conducted field surveys of shopping centers, retail outlets, and South Korean businesses specializing in ginseng and high-tech agricultural products.

Strengthening cooperation with South Korean SMEs is anticipated to accelerate Hai Phong’s goals of increasing occupancy efficiency in its new industrial zones, developing a robust supporting industry ecosystem, and diversifying investment sources.

-Minh Kiệt

Its creation marks a significant step toward enhancing the competitiveness of businesses amidst the challenges of deep economic integration.

The Hanoi People's Committee has issued Decision No. 1892/QD-UBND, approving the establishment of the Center for Business Services and Support.

This new entity is formed by merging the Center for Services and Technological Innovation and the Center for Business Support Services, both of which were under the Management Board of Hanoi High-Tech Parks and Industrial Zones.

Headquartered at Hoa Lac High-Tech Park in Thach That District, the Center operates under the Management Board of Hanoi High-Tech Parks and Industrial Zones. Its creation marks a significant step toward enhancing the competitiveness of businesses amidst the challenges of deep economic integration.

In the face of pressures from globalization, rapid technological innovation, and digital transformation, businesses—particularly small and medium-sized enterprises (SMEs)—require substantial support in areas such as innovation, technology transfer, and sustainable development consulting.

The Center for Business Services and Support aims to serve as a vital bridge, enabling businesses to access resources, enhance human resource quality, optimize production and operational processes, and achieve international standards

-Song Hoàng

The CPI increase attributed to the price hike of the food and food service, housing, electricity, and medical services.

Vietnam’s consumer price index (CPI) rose 3.22% year-on-year in the first quarter of 2025, according to the National Statistics Office (NSO).

The CPI increase was attributed to the price hike of the food and food service, up 3.78%; housing, electricity, water, fuel, and construction materials, surging 5.11%; and pharmaceutical products and medical services, soaring 14.4%.

In March alone, the CPI dropped slightly 0.03% from the previous month, mainly driven by the decrease of petrol and rice prices following the global moves.

The core inflation in the first three months jumped 3.01% compared to the same period last year.

-Huyền Vy

Vietnam will face a number of hurdles as it strives to post double-digit growth in the years ahead, including low public investment efficiency, global trade tensions, and capital misallocation in key sectors.

In order to achieve its ambitious goal of at least 8 per cent economic growth in 2025 and set the stage for double-digit growth in subsequent years, Vietnam must tackle a host of key challenges, from enhancing the efficiency of domestic resources to navigating global economic shifts.

With a strong 7.09 per cent growth rate recorded in 2024, it has outperformed most regional economies. International organizations project this momentum to continue through 2025 and 2026, provided the country seizes opportunities in exports, investment, and structural reforms.

Limited workforce

Amid the global economic uncertainties, international organizations remain cautious in forecasting Vietnam’s growth outlook.

Most recently, on March 12, the World Bank (WB) projected that the country would post GDP growth of only 6.8 per cent this year and 6.5 per cent next. While slightly more optimistic, UOB bank’s forecast still places Vietnam’s GDP growth at just 7 per cent this year and 7.4 per cent next. The feasibility of posting over 10 per cent economic growth in the time ahead has now become a topic of keen interest.

To reach its ambitious target, Vietnam aims to follow the development model of South Korea and Japan from 20-30 years ago, as they are countries with cultural similarities to Vietnam but are decades ahead in economic development. However, unlike the two East Asian countries, Vietnam faces significant challenges in expanding its workforce to sustain domestic economic activities.

Vietnam has already passed the midpoint of its demographic dividend period, with only about 10-15 years left before its population ages and its workforce begins to shrink in number. The country’s workforce is currently growing at just 1 per cent or so each year; a rate insufficient to drive strong economic expansion or boost domestic consumption.

In contrast, East Asian economies that recorded remarkable 10-12 per cent growth also maintained stable workforce growth of 3-4 per cent each year for two decades. This steady increase in workforce, combined with rising income levels and consumption, fueled their rapid economic acceleration. Vietnam experienced similar workforce growth between 1995 and 2010 but was unable to fully capitalize on the opportunity for an economic breakthrough.

Beyond the issue of workforce size, Vietnam’s workplace productivity remains significantly lower than in major regional and global economies. According to AFA Capital, the country’s workforce productivity per hour stands at just $6.40; the lowest among ASEAN’s six largest economies. The figure is just over half of Indonesia’s and a mere 10 per cent of Singapore’s. Without a substantial increase in workplace productivity, Vietnam will struggle to achieve the economic transformation envisioned by the government.

Maximizing investment efficiency

Beyond workforce dynamics, experts have also highlighted investment efficiency as a critical factor in determining whether Vietnam can achieve its growth targets. Public investment disbursement in Vietnam remained low last year. According to the Ministry of Finance, cumulative disbursement since the beginning of 2024 to December 31 stood at VND548.57 trillion ($21.94 billion), reaching just 72.9 per cent of the planned VND752.48 trillion ($30.10 billion) and 80.32 per cent of the Prime Minister’s allocated target. Many experts argue that, aside from concerns over investment quality, Vietnam’s public investment efficiency remains suboptimal.

In addition to public investment, private capital is also considered to be inefficiently allocated. Up to 70 per cent of private sector investment is currently directed towards the real estate market, leading to capital shortages in other key economic sectors.

Moreover, credit growth in recent years has not been particularly strong. At the same time, lending to the real estate sector is rising at double the rate of housing credit growth. This uneven resource allocation poses the risk of higher inflation. When excessive liquidity enters the market without a corresponding rise in material wealth, prices surge, affecting overall market stability. In the long run, an over-concentration of investment in real estate could create an economic bubble, threatening to slow growth across other sectors of Vietnam’s economy.

Global trade tensions

Beyond effectively utilizing its internal resources, Vietnam, a highly export-dependent economy, must also adapt to policy shifts and geopolitical tensions worldwide. After achieving record trade turnover of $786.29 billion in 2024, Vietnam’s exports and imports must grow at 12 per cent to meet its GDP growth target for 2025.

Though UOB believes Vietnam can achieve its growth goals, it argues that exports and manufacturing alone will not be sufficient to drive economic expansion. Its economy is highly open, with exports accounting for approximately 90 per cent of GDP in 2024; the second-highest in ASEAN, after Singapore (174 per cent), and ahead of Malaysia (69 per cent). However, this high level of openness also makes Vietnam more vulnerable to global trade disruptions and conflicts, especially as US President Donald Trump focuses on addressing perceived trade imbalances. The US’s trade deficit with Vietnam has nearly quadrupled since 2016, reaching $124 billion in 2024.

Additionally, escalating trade disputes between major economies threaten to slow Vietnam’s export growth. According to Mr. Tran Nhu Tung, Chairman of the Thanh Cong Textile Garment Investment Trading JSC and Vice Chairman of the Vietnam Textile and Apparel Association (VITAS), though order volumes grew slightly in the opening two months of 2025, the textile and garment industry remains at risk due to global trade volatility. The US is Vietnam’s most crucial market, accounting for over 40 per cent of its textile and garment exports.

“Tariffs are the biggest concern for Vietnam’s textile industry this year,” he warned. “After China, Vietnam is the second-largest textile exporter to the US. However, most raw materials for the sector in Vietnam are imported from China. If the US perceives Vietnam as merely a transit point for Chinese goods, tariffs could be imposed, creating significant challenges for our industry.”

During the economic boom of East Asian nations, the world was entering into an era of globalization. Each country took on a role in the global economy, increasing overall workplace efficiency and fueling rapid consumption growth. This era, lasting 40-50 years, enabled countries like Japan, South Korea, and China to achieve remarkable economic leaps forward. However, Vietnam’s decision to embark on its own “New era - The era of the nation’s rise” comes at a time when globalization is showing signs of reversal, making it more challenging for the country to achieve its growth objectives.

Solutions for economic breakthroughs

Given the risks, experts have proposed several solutions to help Vietnam achieve high economic growth in the years to come.

The first is to enhance and improve the quality of public investment. According to a recent report from UOB, Vietnam’s capital investment rate has remained at around 30 per cent of GDP for at least a decade. Meanwhile, China’s total investment consistently exceeded 40 per cent of GDP during this period. This indicates that Vietnam is investing at a lower level than its northern neighbor, suggesting space for increased public investment, especially as the government aims for double-digit growth.

The second solution is to accelerate digital transformation and adopt AI technologies. With a young population exposed to technology from an early age, Vietnam is well-positioned to integrate these advancements across various economic sectors. The application of high technology and AI will enhance productivity, reduce pressure on the workforce, and strengthen Vietnam’s competitiveness against major global economies.

The third solution is to improve institutional frameworks to unlock private sector potential. Experts note that the private sector often operates more efficiently than State-owned enterprises (SOEs). Unlocking this segment of the economy is crucial as Vietnam seeks to sustain high GDP growth and increase its chance of achieving double-digit growth in the years ahead.

-Việt An

Spanning nearly 73 ha, the terminal can simultaneously accommodate two of the world's largest container ships.

The Hateco Hai Phong International Container Terminal (HHIT) in Lach Huyen, Hai Phong City, officially commenced operation on April 5.

The Lach Huyen port infrastructure construction project - berths 5 and 6, invested in by Hateco Group, marks Vietnam's first deep-water seaport infrastructure development initiative funded by the private sector.

Spanning nearly 73 ha, the terminal includes a 900-m main berth and a 300-m barge berth, with the capacity to simultaneously accommodate two of the world's largest container ships. With a handling capacity of 2.2 million TEUs per year, HHIT solidifies its position as the largest and most modern deep-water port in northern Vietnam.

Mr. Nguyen Duc Tho, Vice Chairman of the Hai Phong City People's Committee, highlighted the consistent growth of cargo throughput at Hai Phong's ports, ranging from 12–15% annually. He noted that the Lach Huyen terminal is envisioned as a gateway and international transshipment hub. The completion of berths 5 and 6 is expected to attract private investment to further develop Vietnam's deep-water seaport system.

Mr. Nguyen Xuan Sang, Deputy Minister of Construction, reaffirmed the maritime sector's development orientation, emphasizing that approximately 95% of the investment capital for seaport infrastructure is expected to come from non-state economic sectors.

On the occasion, Hateco Group signed a Memorandum of Understanding (MoU) with APM Terminals, a member of the A.P. Moller-Maersk Group, to establish a strategic partnership in Vietnam's seaport and logistics sector. The collaboration will focus on port development and operation as well as logistics services.

-Phạm Long

Of the Q1 trade turnover, exports reached $102.84 billion, up 10.6 per cent year-on-year.

According to data released on April 6 by the National Statistics Office, under the Ministry of Finance, the total import-export turnover in March reached $75.39 billion, marking an increase of 18.2 per cent month-on-month and 16.6 per cent year-on-year.

Of the figure,  export turnover stood at $38.51 billion, up 23.8 per cent  month-on-month, with the domestic economic sector contributing $11.08 billion, up 32.1 per cent, and the foreign-invested sector (including crude oil) contributing $27.43 billion, up 20.7 per cent.

Compared to the same month in 2024, March export turnover rose by 14.5 per cent, with that from the domestic sector increasing by 18.7 per cent and from the foreign-invested sector by 12.9 per cent.

As a result, total trade turnover in the first quarter of 2025 amounted to $202.52 billion, up 13.7 per cent compared to the same period last year, with exports increasing by 10.6 per cent and imports  by 17.0 per cent year-on-year.

Of the Q1 trade turnover, exports reached $102.84 billion, up 10.6 per cent year-on-year, with  the domestic sector contributing $29.02 billion or 28.2 per cent of the total, up 15.0 per cent, and the foreign-invested sector contributing $73.82 billion or 71.8 per cent, up 9.0 per cent.

There were 18 export items with a turnover of over $1 billion in Q1/2025, accounting for 84.5 per cent of total exports. Five of these items surpassed the $5 billion mark, contributing 59.9 per cent of total export turnover.

In terms of structure of exported products, processed industrial goods accounted for $90.92 billion or 88.4 per cent, followed by agricultural and forestry products ($8.86 billion, 8.6 per cent), aquatic products ($2.31 billion, 2.3 per cent), and fuel and mineral products ($0.75 billion, 0.7 per cent).

In terms of import turnover, Vietnam recorded  $36.88 billion in March, representing a 12.9 per cent increase from February, with the domestic sector contributing $13.98 billion (up 17.8 per cent month-on-month) and the foreign-invested sector  $22.9 billion (up 10.1 per cent).

Compared to March 2024, imports rose 19.0 per cent, with the domestic sector up 20.2 per cent and the foreign-invested sector up 18.3 per cent.

In Q1/2025, total import turnover reached $99.68 billion, an increase of 17.0 per cent year-on-year, with the domestic sector contributing  $36.78 billion (up 19.3 per cent year on year) and the foreign-invested sector $62.9 billion (up 15.8 per cent year on year).

There were 17 imported items each with turnover surpassing $1 billion in Q1/2025, accounting for 77.2 per cent of the total import value. Two items surpassed the $5 billion threshold, contributing 44.4 per cent.

Production materials made up the bulk of imports with $93.51 billion (93.8 per cent), including machinery, equipment, tools, and spare parts (50.8 per cent) and raw materials, fuels, and other inputs (43.0 per cent). Consumer goods accounted for $6.17 billion, or 6.2 per cent of the total imports.

Regarding trade markets, the United States remained Vietnam’s largest export market in Q1/2025 with a turnover of $31.4 billion. China was the largest import source with $38.1 billion. 

In total, preliminary data showed a trade surplus of $1.63 billion in March and $3.16 billion in Q1, much down compared to $7.7 billion in the same period last year. The domestic sector posted a trade deficit of $7.76 billion, while the foreign-invested sector (including crude oil) recorded a surplus of $10.92 billion.

In terms of services, export turnover in Q1/2025 was estimated at $7.58 billion, up 21.7 per cent year-on-year. Tourism services accounted for $4.2 billion (55.4 per cent of total service exports), up 29.2 per cent, while transportation services reached $2.0 billion (26.4 per cent), up 24.2 per cent.

Service imports in Q1/2025 were estimated at $9.22 billion, up 18.0 per cent from the same period last year. This included $3.16 billion in insurance and freight services tied to imported goods. Transport services accounted for $3.73 billion (40.5 per cent), up 17.5 per cent, while tourism services amounted to $3.4 billion (36.9 per cent), up 30.8 per cent. The service trade deficit in Q1/2025 stood at $1.64 billion.

-Viet An

The figure marking the highest growth rate in the first quarter since 2020.

Vietnam’s GDP was estimated to grow by 6.93% in the first three months of the year, the highest growth rate in the first quarter since 2020, according to the National Statistics Office.

The figure exceeded the target of 6.2% - 6.6% set by the Government.

The growth was attributed to the development of the three key economic sectors. 

Services enjoyed a growth of 7.7%, contributing over 53.7% to the added value of the economy, boosted by the rising consumption demand during the Lunar New Year holiday and the increase in number of international tourists.

The industrial and construction sector displayed robust performance, with added value rising 7.42% in the period, contributing 40.17% to the added value of the economy.

The agro-forestry and fishery sector recorded a stable increase of 3.74%, contributing 6.09% to the total added value of the whole economy.  

 

-Anh Nhi

The disbursement accounting for just 9.53% of the annual target as of March 31.

Prime Minister Pham Minh Chinh has requested relevant ministries, agencies and localities to take more measures to accelerate public investment capital disbursement in 2025.

According to the PM's dispatch dated April 5, the disbursement of the public investment capital remained low, reaching only 9.53% of the annual target assigned by the PM as of March 31.

The PM asked ministries, agencies, and local governments to prioritize the timely disbursement of public investment funds and propose urgent solutions to address the remaining unallocated central budget capital within the 2025 plan.

They were instructed to concentrate on flexible, creative and effective measures to speed up the disbursement  of public investment capital.

They were also directed to promote site clearance and construction progress, increase inspection and supervision, and remove obstacles facing projects.

 

 

-Tiến Dũng

At a cabinet meeting on April 6, Prime Minister Pham Minh Chinh stated that Vietnam will not change the GDP growth target of at least 8 per cent for 2025

Chairing a cabinet meeting on Sunday morning (April 6), Prime Minister Pham Minh Chinh stated that Vietnam will not change the GDP growth target of at least 8 percent for 2025.

Vietnam’s GDP grew by 6.93% in the first quarter of this year, the highest growth rate in the first quarter since 2020, according to data from the National Statistics Office under the Ministry of Finance.

The Government News quoted the Prime Minister as saying at the cabinet meeting that

 Regarding the U.S. Administration's announcement to impose a 46% reciprocal tariff on imports from Vietnam, the Prime Minister said, as quoted by the Government News, Vietnam highly respects and resolves the issues concerned by the U.S., and negotiates with the U.S. on the basis of the high-level agreement reached by General Secretary To Lam and President Donald Trump during their phone conversation on April 4.

PM Chinh tasked Deputy Prime Minister Ho Duc Phoc and relevant agencies to develop concrete negotiation plans.

He also urged the Ministry of Finance, the Ministry of Industry and Trade, and relevant ministries, agencies and localities to focus on removing bottlenecks against and create favorable conditions for foreign investors, including those from the U.S. to do business in Vietnam.

-Vân Nguyễn

The country’s GDP  growing  by 7.7% in the first quarter of this year, up from 7.6% in the fourth quarter of 2024.

Standard Chartered Bank’s latest macroeconomic update about Vietnam  forecast the country’s GDP to grow by 7.7% in the first quarter of this year, up from 7.6% in the last quarter of 2024, according a report from the Government News.

The bank's forecast for Vietnam's 2025 GDP growth remains at 6.7%, with moderation expected in the second half.

According to the bank, Vietnam's economic outlook remains supported by strong integration into global trade networks through multiple free trade agreements, along with continued foreign direct investment (FDI) inflows. These factors continue to strengthen the country's position in global production and exports.

Key economic indicators for March point to steady performance. Retail sales growth likely eased to 6.2 per cent in March. Export growth may have moderated to 8.2 per cent given a higher base; electronics exports have likely continued to improve year-to-date.

Imports and industrial production likely grew 6 per cent and 6.2 per cent, respectively. Inflation is expected to 3.4 per cent in March (from 2.9 per cent previously). If inflationary pressures persist, they may pose challenges for monetary policy.

Mr.Tim Leelahaphan, Senior Economist for Vietnam and Thailand, Standard Chartered Bank, shared, while economic growth remains strong, trade risks and currency fluctuations could impact policy decisions. Vietnam may consider have flexible monetary policies to ensure resilient financial sector and navigate potential economic fluctuations.

-Vân Nguyễn

2025 will witness a host of macro-economic developments as Vietnam aims to boost its GDP growth and meet other economic indicators.

Vietnam’s economy is expected to see major shifts in 2025. At an extraordinary session in February, the National Assembly (NA) approved an updated economic and social development plan, significantly raising the 2025 growth target to at least 8 per cent; far exceeding the previously approved 6.5-7 per cent goal. The projected average consumer price index (CPI) growth was also adjusted upwards, to 4.5-5 per cent, compared to the earlier target of 4.5 per cent.

Vietnam marks 50 years of reunification this year, setting the stage for its economic rise ahead of the 14th National Party Congress in early 2026.

Seeking ambitious targets

Global financial institutions have taken note of Vietnam’s economic momentum. The World Bank now forecasts GDP growth of 6.8 per cent for 2025 and 6.5 per cent for 2026. The Asian Development Bank (ADB) projects 6.6 per cent this year, while the International Monetary Fund (IMF) anticipates a 6.1 per cent expansion. These projections reflect growing confidence in Vietnam’s ability to sustain strong economic performance amid global uncertainties.

Over the past decade, maintaining macro-economic stability, featuring low inflation and interest rates, a stable exchange rate, a healthy financial system, and sustainable public debt, has always been a top priority, serving as the foundation for economic development. The CPI has typically remained below 4 per cent. However, 2025 presents a formidable challenge, as the government sets an ambitious growth target exceeding 8 per cent, while acknowledging that macro-economic stability may need to be sacrificed in pursuit of this goal, driven by the unwavering resolve to achieve it at any cost.

The pressing question is: what strategies can propel such a high growth rate? In the long run, the key lies in boosting overall workplace productivity through technological advancements and enhancing investment efficiency, particularly in education and training. This will be crucial in building a professional public sector capable of executing policies effectively and developing a leadership team with strong oversight and guidance capabilities - something for which no clear selection mechanism currently exists.

The push for a technology-driven economy is beginning to take shape. In March, the Ministry of Finance (MoF) and the State Bank of Vietnam (SBV) were tasked with presenting a regulatory framework for managing digital assets and cryptocurrencies to the government. The MoF is also preparing a pilot resolution to govern activities related to digital assets and tokenized assets. The establishment of a digital currency exchange at a financial hub could unlock opportunities for Vietnam to develop its digital asset market and accelerate the digital economy, positioning the country as a regional and global center for digital assets.

However, this transition is far from straightforward and comes with significant risks. Digital assets and cryptocurrencies exhibit extreme volatility, often surpassing that of stock markets. Cross-border transactions are seamless, often anonymous, posing challenges for regulatory oversight, including anti-money laundering and counter-terrorism financing efforts. Moreover, recognizing cryptocurrencies not issued by the State could have profound implications for monetary policy.

In the short term, hopes for high growth are largely pinned on bank credit as a vital funding channel. The initial credit growth target for 2025 is set at approximately 16 per cent, up 0.92 percentage points from 2024, with potential adjustments to 18-20 per cent, equating to VND2,500-3,000 trillion ($100-120 billion), or significantly higher than the 12-14 per cent growth seen in recent years. Fiscal policy is expected to play a complementary role, through taxes, fees, revenue enhancements, and expenditure optimization, with the budget deficit revised upwards by the NA to 4-4.5 per cent of GDP.

Public investment will continue to serve as a growth driver, with total societal investment projected at no less than $174 billion. Public investment alone is expected to reach VND875 trillion ($36 billion), exceeding the initial 2025 allocation by VND84.3 trillion ($3.37 billion). Private investment is estimated at $96 billion, FDI at $28 billion, and other investments at $14 billion.

Several critical infrastructure projects are slated for completion in 2025, including Terminal 3 at Ho Chi Minh City’s Tan Son Nhat International Airport, expansions to the T2 International Terminal at Hanoi’s Noi Bai International Airport, and the breaking of ground for metro lines in the two cities, along with the development of Lien Chieu Port in central Da Nang city. The Lao Cai - Hanoi - Hai Phong railway project is also being considered, to be funded through a 10 per cent reduction in recurrent expenditures and increased 2024 budget revenue.

The decision to raise the budget deficit to 1.5-times the perceived sustainable level (3 per cent) raises concerns about inflationary pressure, particularly as administrative restructuring requires substantial financial resources, not just severance payments for early retirees. Initial estimates for ministry and agency mergers alone stood at VND160 trillion ($6.4 billion). As administrative reforms expand, eliminating district-level governance and merging provinces and communes on a large scale, funding sources remain unclear.

One notable shift, however, is the evolving perspective on the role of the private sector at the highest levels of leadership. A new Party resolution on private sector development is in the works, and is expected to be submitted to the Politburo shortly. This resolution acknowledges the private sector as the most crucial driver of economic growth. Key policy changes are anticipated, but the most fundamental principle - “people and businesses should be allowed to do anything not explicitly prohibited by law” - must be upheld from the Party Central Committee to grassroots Party organizations and enshrined in the legal framework, starting with the Constitution.

The private sector currently contributes around 46 per cent of GDP, accounts for approximately 30 per cent of State budget revenue, and employs 85 per cent of the workforce. It plays a crucial role in sustaining Vietnam’s socialist-oriented economy by creating jobs and income opportunities. Notably, non-agricultural household businesses make up 33 per cent of GDP, while officially registered private enterprises have remained at around 10 per cent for many years.

However, Vietnam’s socialist-oriented market economy has yet to resolve the fundamental relationship between “market mechanisms” and “socialist orientation” in a truly effective manner. Strengthening the market economy lays the foundation for achieving socialist goals such as equitable growth, universal healthcare and education, social trust, and environmental protection. Aligning with commitments under free trade agreements (FTAs) and international standards will be instrumental in addressing this challenge.

A level playing field is vital for market efficiency, yet the pace of equitization and State divestment remains sluggish. State capital should continue to be withdrawn from industries where domestic private enterprises are already capable of providing goods and services, such as food processing, retail, construction, road transport, and steel production. Simultaneously, it is essential to define the sectors where State-owned enterprises (SOEs) must remain to safeguard public interests.

The most critical element of a market economy is price mechanisms, which should be determined by supply and demand as well as competition among businesses and market players. Currently, the focal point of reform is the pricing framework for key resources such as land, capital, energy, and labor.

Land valuation reforms and market impact

The newly-amended Land Law paves the way for a market-based land valuation mechanism within the framework of State-owned land, ensuring true property rights for economic entities. The removal of the land price framework and the adoption of market-based valuation principles, such as auctions, have driven land prices upwards due to rising costs factored into pricing, and both accumulated investment costs over recent years and future compensation for site clearance have surged.

Some argue that this price increase is only a short-term effect, while in the long run, land prices will be determined by actual market supply and demand. While this scenario is possible, a significant drop in land prices remains uncertain. With limited land supply, prices are likely to stay high relative to household incomes, making land access increasingly difficult for both businesses and individuals without appropriate measures. In Vietnam, housing prices are rising far faster than workers’ incomes, while the supply of social housing remains far below expectations and targets.

It is crucial to address the challenges that have stalled certain projects due to unresolved issues. Regulatory agencies, primarily administrative rather than judicial bodies, currently determine sanctions based on violations and their severity. However, in judicial practice, most violations are subject to corresponding penalties rather than indefinite project suspension. Even in the absence of specific regulations, cases can still be resolved based on legal precedents. This is not about legitimizing violations but about ensuring practical enforcement.

A clear stance on the real estate sector is needed: Should it be encouraged to support urban development in line with economic growth and improved living standards, or should it be restricted due to its heavy capital absorption, potential negative impact on other industries, and economic risks?

Both individuals and businesses tend to invest in real estate due to its high returns, with speculation essentially serving as a means of asset value preservation. Implementing a real estate tax may have limited impact. The absence of a property tax, along with Vietnam’s globally low transaction tax rates, is not necessarily the driver of speculation. In fact, real estate taxation in Vietnam is not low, and land users must pay substantial land use fees upfront when acquiring land or obtaining land use rights certificates.

Switching to an annual land lease payment model does not provide stability for businesses. Instead, a more effective approach is to diversify and expand investment channels, increasing income-generating opportunities and facilitating business and financial investments, such as savings, stocks (equities and bonds), and other alternatives.

Capital market development

The credit limit management mechanism for 2025 remains unchanged, despite an expansion in credit growth. The credit ceiling is proactively determined and allocated by State agencies, eliminating the need for commercial banks to apply for approval. The SBV justifies maintaining credit limits due to concerns over overheating growth, systemic safety risks, and inflationary pressure. While the SBV has multiple tools to ensure liquidity and prevent excessive credit expansion, such as reserve requirements and capital adequacy ratios, it is still studying a gradual roadmap for phasing out credit limits.

These regulatory tools allow banks with high capital safety ratios to operate without credit restrictions while compelling those with lower ratios to strengthen their liquidity buffers. However, persistently high interest rates have remained a major challenge for businesses in recent years. The control of interest rates, even for short-term lending, is considered a contributing factor. A deeper issue lies in businesses’ reliance on short-term bank loans for investment projects, while Vietnam’s credit-to-GDP ratio continues to rise alarmingly, from 123 per cent in 2021 to nearly 125 per cent in 2022 and 132.7 per cent in 2023.

Despite this, the Prime Minister’s directive strictly prohibits commercial banks from independently raising interest rates outside of policy guidance, engaging in unfair competition, or distorting market equality. This directive, however, does not fully consider the fundamental differences in capital mobilization between State-owned and private banks, as State-owned banks benefit significantly from deposits from the State Treasury and the Deposit Insurance of Vietnam.

The SBV may further lower policy rates if banking system costs decrease. Since last September, the US Federal Reserve (Fed) has begun cutting interest rates, easing pressure on the VND/USD exchange rate. However, this trend remains uncertain, as US economic policies, particularly increased import tariffs, could fuel inflation.

Long-term capital mobilization for investment projects remains constrained due to an underdeveloped financial market, including both equity and bond markets. The corporate bond market has shrunk by one-third in recent years, though there have been signs of recovery in late 2024 as the Law on Securities tightens issuance conditions. Difficulties in issuing both public and private bonds have forced many businesses back to bank loans, increasing maturity mismatches and liquidity risks for the banking system.

Rather than becoming a primary corporate funding channel, the bond market is evolving into a “playground” for financial institutions, where banks dominate both issuance and purchase activities. Institutional investors such as securities companies, insurance firms, pension funds, and investment funds account for only a small share of the market.

In 2025, Vietnam’s stock market is expected to be upgraded from frontier to emerging market status, attracting a surge of foreign capital. Amendments to the Law on Securities will expand the participation of foreign institutional and individual investors in the privately-issued bond market, increasing the SBV’s supervisory responsibilities over corporate foreign borrowing within annual government-approved limits.

It is time to further open the capital and foreign exchange markets. Attracting foreign investment for economic development, including infrastructure, technology startups, and the establishment of international financial centers and free economic zones requires capital market and forex liberalization. This demands rigorous oversight to ensure the stability of financial and monetary markets.

While partnering with FDI enterprises may provide access to cheaper capital, this channel primarily benefits large corporations. The fundamental solution for meeting Vietnam’s medium and long-term capital needs remains the development of the stock and bond markets.

A draft decree on the Investment Support Fund has been submitted to the NA Standing Committee but has yet to be issued. The fund’s eligibility criteria focus on high-tech and research and development (RD) enterprises, limiting support to a select group of businesses. Companies failing to meet these criteria may face negative impacts from the Global Minimum Tax (GMT) policy.

Upgrading technology and enhancing RD capabilities require substantial time and capital. As a result, businesses that do not qualify for support may gradually downsize or exit the Vietnamese market. There is still no consensus on mitigating the impact of the GMT, as the draft Law on Corporate Income Tax continues to propose tax incentives for affected enterprises.

Electricity: Key infrastructure

The development of transportation, including electric vehicles (EVs) and high-speed rail, requires corresponding investments in the power sector.

The newly-issued electricity pricing mechanism allows for more flexible price adjustments, with changes permitted at least once every three months. However, if electricity tariffs continue to be subsidized and fail to fully account for production and business costs while input costs remain market-driven, Vietnam Electricity (EVN) will lack the resources to invest in power generation and transmission systems.

Currently, electricity pricing prioritizes the interests of industrial producers over those of power suppliers, distributors, and households. It is essential to implement the principle that the average selling price of electricity must be at least equal to or higher than the purchasing price through distribution companies, while also eliminating cross-subsidization, particularly between household consumers and businesses.

ASEAN countries are working towards establishing a regional electricity market, with cross-border power connections via submarine cables to meet growing energy demand, while pursuing greenhouse gas reduction targets. The ongoing conflict in Ukraine provides critical lessons on energy security.

The Vietnamese Government has committed to long-term climate goals, including net-zero emissions by 2050. However, according to the United Nations Development Programme, Vietnam allocates less than 1 per cent of GDP to climate adaptation, excluding the need to enhance forecasting and disaster warning capabilities.

Achieving net-zero emissions will require significant investments in electricity storage, as renewable energy sources like solar and wind are entirely dependent on nature. Except for biomass energy, other renewable sources cannot be practically utilized without a stable baseload power supply. Recognizing this, the NA has approved a policy to restart nuclear power projects, to diversify Vietnam’s energy mix.

Domestic market and personal income tax

In recent years, Vietnam’s economic growth has been primarily driven by investment capital and exports. As a result, policies have largely focused on investment and exports rather than final consumption.

Final consumption accounts for the largest share of GDP utilization but has often been constrained due to concerns that it reduces savings, thereby limiting investment and growth. Consequently, monetary policy has restricted consumer credit, while fiscal policy has imposed high personal income taxes.

The Covid-19 pandemic underscored the crucial role of final consumption. Despite the government’s efforts to stimulate production, people had no income due to lockdowns and travel restrictions, leading to reduced spending. As a result, many growth-promoting initiatives yielded limited outcomes. Reducing indirect taxes, such as value added tax, was necessary but did not significantly boost consumption, as inflation persisted and households remained cautious with their expenditure.

Currently, international market conditions are less favorable for growth due to geopolitical tensions. This necessitates a reassessment of growth drivers and adjustments in economic development strategies. Policies, including monetary and fiscal measures, should strike a better balance between production incentives and consumption stimulation. Urgent revisions to personal income tax regulations are needed to increase disposable income and purchasing power. Only then can production-boosting measures be effective, ensuring goods and services are consumed rather than stockpiled.

Reducing the actual Personal Income Tax rate (to not exceed the Corporate Income Tax rate of 10-20 per cent) will not necessarily decrease State revenue. Similar to past tariff reductions, economic expansion can significantly increase tax revenues over time.

In summary, 2025 will bring profound socio-economic transformation. The adjustment of the 2025 GDP growth target to over 8 per cent aims to fulfill the 13th Party Congress’s goal of making Vietnam a high-income country by 2045. This ambitious growth target, however, presents challenges to macro-economic stability. If not achieved, it could complicate future economic management, especially as the administrative system undergoes significant downsizing in 2025, dismantling old mechanisms while new ones remain in pilot phases.

Administrative streamlining is essential to simplify burdensome procedures that hinder businesses and society while mitigating adverse impacts. The opportunity for success through a new growth model remains, but it requires expertise and professionalism, beyond just political will and administrative directives.

-Phan Thah Ha