VIETNAM TAKES STEPS TO REALISE 8.3–8.5% GROWTH TARGET IN 2025

Việt Nam is stepping up efforts to achieve an ambitious GDP growth target of 8.3–8.5 per cent this year, despite global uncertainties and divergent economic forecasts.

Authorities are focusing on boosting traditional growth drivers such as investment, consumption, and exports. — VNA/VNS Photo

HÀ NỘI — Việt Nam is stepping up efforts to achieve an ambitious GDP growth target of 8.3–8.5 per cent this year, despite global uncertainties and divergent economic forecasts.

Authorities are focusing on boosting traditional growth drivers such as investment, consumption and exports while implementing a broad array of policy measures to maintain economic momentum.

Recent GDP projections for Việt Nam in the second half of 2025 show a wide divergence.

The Asian Development Bank (ADB) and the Standard Chartered have revised their forecasts downward to 6.3 per cent and 6.1 per cent, respectively, citing external risks, particularly from rising trade tensions and new US tariff policies scheduled to take effect on August 1.

In contrast, several financial institutions remain upbeat. The United Overseas Bank (UOB) raised its projection from 6 per cent to 6.9 per cent, CitiGroup revised its forecast from 6.6 per cent to 7 per cent, and Maybank increased its projection to 7.3 per cent. Meanwhile, the BIDV Research Group anticipated the country's growth could reach 7.5–7.7 per cent in a base scenario and as high as 7.8-8.1 per cent under an optimistic scenario.

This disparity underscores continued uncertainties in the global economic environment and challenges facing Việt Nam, especially as the US's new tariffs are expected to impact major export sectors like electronics, textiles, furniture, and aquatic products.

Despite these headwinds, the Ministry of Finance has proposed a bold economic growth scenario of 8.3–8.5 per cent for 2025, which was approved by Prime Minister Phạm Minh Chính. This target is seen as achievable and essential to lay the groundwork for potential double-digit growth in the coming year.

Traditional economic engines

To support this effort, the government plans to leverage traditional economic engines. The Ministry of Finance estimates that total social investment in the second half of the year could reach US$111 billion, with retail and service revenue growing by at least 13 per cent, and total trade volume increasing by 17 per cent or more.

PM Chính has stressed that the growth target is “not impossible” and must be pursued decisively. Key policy directions include accelerating public investment disbursement, mobilising social investment, stimulating domestic consumption, and negotiating trade agreements, particularly with the US, to ease export pressures.

The second half of the year offers a seasonal advantage, with heightened domestic and international demand expected during the year-end shopping period. The government is working to ensure these trends are translated into real economic gains.

Measures being rolled out include cracking down on smuggling and trade fraud, developing tourism products to attract foreign visitors, and ensuring timely compensation and policy implementation for public employees affected by administrative restructuring.

To stimulate domestic demand, fiscal policy is being loosened. The Ministry of Finance is implementing tax relief measures, including a 2 per cent VAT cut and a proposal to increase personal income tax deductions. Additionally, financial support for civil servants is being expedited to enhance household consumption.

Albert Park, chief economist at ADB said that despite the increased risks from tariff uncertainties, domestic reforms, if implemented effectively and quickly, can mitigate these risks by strengthening domestic factors. This will also positively support Việt Nam’s economic growth in 2025. — VNS

Source: VNS