Vietnam likely to achieve 8% GDP growth in 2025

GDP growth in 2024 projected to surpass targets

Speaking at the Vietnam Macroeconomic Policy Dialogue: Reflecting on 2024 and Prospects for 2025, organised by the Vietnam Institute for Economic and Policy Research (VEPR) under the University of Economics (Vietnam National University, Hanoi) and the Economic Magazine on January 3, economic experts forecast that Vietnamese economic growth in 2024 could exceed 7%.

According to Dr. Nguyen Quoc Viet, deputy director of VEPR, GDP growth in 2024 is projected to surpass the targets set by the National Assembly (NA) and the Government earlier this year, which were in the range of 6% to 6.5%.

Economic experts said that Vietnamese GDP growth in 2024 was bolstered by both domestic and global economic factors. Additionally, the country's economic growth was supported by rapidly declining inflation taking place in most economies due to tightened monetary policies, low energy prices, and easing supply chain pressures, leading to stabilized global inflation.

Moreover, global trade is projected to reach an all-time high of nearly US$33 trillion in 2024, an increase of US$1 trillion compared to the previous year.

"International investment is recovering, with FDI inflows rising by 31% in the first half of 2024 compared to the same period in 2023, and by 8% compared to the second half of 2023," stated Dr. Viet.

According to Dr. Viet, Vietnamese export momentum continued its growth trajectory in 2024. During the past 11 months of last year, export turnover rose by 14.4%, while imports increased by 16.4%, resulting in a trade surplus of US$24.31 billion. In addition, FDI attraction remained a bright spot in the Vietnamese economic landscape for 2024.

"As of November 30, 2024, the total registered FDI in Vietnam reached US$31.4 billion, a 1% increase compared to the same period from last year, while realized FDI amounted to US$21.68 billion, up 7.1%, marking the highest growth in the past five years," stated Dr. Nguyen Quoc Viet. He also noted that 2024 witnessed a gradual recovery in private investment. During the final nine months of last year, private investment surged by 7.1%, reflecting the growing level of confidence among domestic enterprises.

GDP growth forecast to reach 7.5% to 8% in 2025

In his address given at the seminar, economic expert Dr. Can Van Luc predicted that Vietnamese GDP growth this year is likely to reach 7.5% to 8%.

Sharing the nation’s growth drivers in 2025, Dr. Viet said that growth drivers in public investment, private investment, import-export activities, and investment attraction are all maintaining their growth momentum.

However, alongside its growth drivers, the Vietnamese economy still faces both internal and external challenges. On the external front, economic experts highlight that, in addition to the rising trade protectionism policies worldwide, the nation is also confronting challenges related to climate change and the new policies of US President-elect Donald Trump.

Internally, the Vietnamese economy faces numerous challenges as domestic businesses continue to struggle with high input costs, uneven and unsustainable order recovery, labour shortages, low productivity, and increasing demands for digitalisation and green transformation.

Additionally, public investment disbursement remains slow and uneven. Risks in the corporate bond market persist, while the real estate market shows signs of a sluggish recovery, with property prices remaining high.

The guidance on new laws and the development of institutional frameworks for emerging sectors such as the digital economy, green economy, circular economy, and energy transition remain slow, Dr. Viet added.

To achieve a GDP growth rate of over 8% in the year ahead and sustain higher growth over subsequent years, Dr. Viet emphasized that the nation focus on six key solutions.

Firstly, ensure macroeconomic stability while fostering faster and more robust economic recovery.

Secondly, reform and streamline the state apparatus to establish an effective, efficient, modern, transparent, comprehensible, and easily enforceable institutional and governance system, thereby reducing business risks and compliance costs.

Thirdly, promote sustainable economic growth by adopting new growth models aligned with global trade and investment trends. In addition, address short-term risks by ensuring adequate policy space for macroeconomic adjustments to support domestic economic activities and vulnerable groups.

Moreover, in the medium term, upgrade infrastructure, enhance the skills and qualifications of the workforce, and boost the general development of science and technology as a means of improving overall competitiveness and encourage innovative and sustainable business practices.

Finally, in the long term, develop targeted and focused development strategies and policies while ensuring the efficient disbursement of public investment.

According to economic experts, to achieve the high growth target in 2025 and over the following years, one of the solutions that the nation needs to implement immediately is to focus on solving institutional bottlenecks, because this is the important "bottleneck" that is reducing Vietnamese attractiveness in terms of the investment environment and has not created space and development motivation for the business sector.