INFRASTRUCTURE, EXPORTS TO DRIVE VIETNAM’S GROWTH IN 2025 – REPORT

Workers process cashew nuts for export at a facility in Vietnam – PHOTO: VGP

HCMC – Vietnam’s economy is projected to grow 7.2% in 2025, fueled by government-led infrastructure investments, exports, and domestic consumption, according to a macroeconomic report by Thien Viet Securities JSC.

The Government has set a more ambitious growth target of 8%, focusing on investment, exports, and regulatory reforms. Fiscal policy in 2025 will prioritize infrastructure spending and tax relief to sustain economic momentum, the company said.

The state budget for 2025 has been set at nearly VND2.55 quadrillion, up 20.3% against the previous year. Public investment spending has been raised to a record VND790 trillion, up 16.7% from 2024.

Key projects include the North-South Expressway, Long Thanh International Airport, HCMC Beltway No. 3, Beltway No. 4 in Hanoi, and 12 other major infrastructure initiatives.

Tax relief measures will continue to support businesses and consumers. Resolution 01/NQ-CP proposes extending tax cuts, fee reductions, and land rental deferrals, while Resolution 174/QH15, passed in late 2024, extends the two-percentage-point VAT cut until June 30, 2025.

Vietnam’s retail and services sector is forecast to grow by 10% in 2025, supported by infrastructure upgrades and increased consumer spending. The labor market is expected to expand, with 500,000 new jobs created in 2024, a 1.1% rise from the previous year. Real wages grew by 5% in 2024, further driving domestic consumption.

The tourism sector is set to benefit from recovering international arrivals, particularly from China, Taiwan, and South Korea. Visa exemptions for three European nations and investments in tourism infrastructure are expected to boost the industry.

Vietnam’s exports are projected to grow 11% in 2025, with high-tech products accounting for 44% of total exports in 2024. Analysts expect continued growth in global technology spending to sustain demand.

Traditional export sectors, including textiles and footwear, are forecast to grow by 12%, driven by free trade agreements such as the EU-Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The U.S. is expected to remain Vietnam’s largest export market. Analysts suggest that the Trump administration might not impose new tariffs on Vietnam in 2025, as Vietnamese exports, including electronics and apparel, do not significantly compete with U.S. domestic production.

However, exports to China may face challenges due to weak demand, while shipments to Europe are expected to grow by 13% in 2025 and 15% in 2026, benefiting from ongoing EU-China trade tensions.

Source: The Saigon Times