Brian Jeffrey
In order to achieve a GDP growth rate exceeding 8%, the government needs to evaluate the resources at hand, enhance mobilization strategies, and implement effective risk management practices.
This entails innovative solutions to seize opportunities, minimize risks, and promote sustainable economic growth.
On February 12, during the opening of the ninth extraordinary session of the National Assembly, Minister of Planning and Investment Nguyen Chi Dung announced the economic and social development plan for 2025, aiming for at least 8% GDP growth.
According to Minister Dung, the government intends to raise the GDP growth target for 2025 from the previously set 6.5-7% to a minimum of 8%.
The updated plan seeks to achieve a GDP exceeding $500 billion and a per capita GDP of over $5,000, with an average consumer price index (CPI) increase of 4.5-5%.
To meet these challenging goals, Minister Dung stressed the importance of transforming policies. This transformation involves shifting from a restrictive mindset of “if it can’t be managed, it should be banned” to a governance model that effectively combines strict oversight with support for development.
A regulatory approach based on results will take precedence over excessive pre-approval requirements, emphasizing post-implementation monitoring along with improved inspections.
The government also acknowledges the importance of enhancing public investment, encouraging private sector involvement, and expediting industrial processing and manufacturing activities.
Other key priorities involve fostering consumer spending, boosting tourism, increasing exports, and developing new growth engines alongside advanced production capabilities.
In discussing the proposal, Economic Committee Chairman Vu Hong Thanh recognized the need to revise the 2025 growth target to fit with the long-term socio-economic objectives for the period of 2021-2025.
However, the committee pointed out that both local and global economic conditions pose ongoing challenges. As of January 2025, business performance has not significantly improved, with over 58,300 companies exiting the market.
The industrial production index (IIP) has seen a slight year-on-year increase of only 0.6%, while the Purchasing Managers’ Index (PMI) has remained below the 50-point mark for two consecutive months.
In light of these issues, the committee urged the government to thoroughly analyze global economic trends, especially those affecting Vietnam’s main trading partners. It is crucial to pay attention to financial security, the sustainability of national debt, and the overall feasibility of the proposed targets.
Additionally, the evaluation of resource availability and risk management strategies remains vital to attaining the GDP target while ensuring long-term economic stability.
The committee also supports a revision of the average CPI target to 4.5-5% to provide more flexibility in managing fiscal and monetary policy. However, inflation must remain a key concern, as it influences macroeconomic stability, purchasing power, and business expenses.
Chairman Thanh emphasized that measures to control inflation must align with growth strategies, macroeconomic stability, and public welfare, which includes setting clear policies for state-managed prices in sectors like education and healthcare that impact family budgets.
The Economic Committee is also in favor of adjusting fiscal deficit and public debt targets. If needed, the fiscal deficit may rise to about 4-4.5% of GDP, while public and external debt levels may reach or slightly surpass warning thresholds of 5% of GDP to secure more investment resources.
Nevertheless, clear communication regarding how these increased deficits and debts will be utilized is essential. Proper resource allocation and strict adherence to budgeting regulations are critical for long-term financial health.
To meet the 8% GDP growth goal, the committee recommends that the government keep a close watch on global economic and political changes and act quickly to address emerging challenges. This is particularly important given the growing geopolitical tensions, trade conflicts, and protectionist measures among major economies.
Public investment is expected to play a significant role in driving growth in 2025, with nearly 890 trillion VND ($35 billion) set aside for development projects. The government must take specific steps to ensure efficient budget execution, effective investment management, and full disbursement of public funds.
Efforts should aim at utilizing public investment to encourage private sector participation, as part of a strategy to leverage public funding for broader economic investments.
Moreover, the committee advised the government to implement focused monetary and fiscal policies to enhance domestic consumption, tourism, and overall demand.
Streamlining investment processes and eliminating regulatory obstacles are essential to improving the business environment. A complete review of national planning frameworks is necessary to resolve conflicts and reduce land access costs for companies.
Vietnam should also take advantage of its existing 17 free trade agreements (FTAs) while exploring new trade agreements with emerging markets. Entering niche markets, ensuring transparency in export value chains, and proactively managing trade defense strategies are vital to alleviate potential tariff risks.
The committee highlighted the need to maintain administrative efficiency to avoid disruptions that could adversely affect businesses and citizens. Improving workforce productivity and social security policies should remain a priority.
Furthermore, the government should develop practical policies to recognize and support officials who exhibit innovation, proactivity, and accountability in driving economic reforms. Fostering bold decision-making and safeguarding officials acting in the public’s interest will be crucial for creating a more dynamic and effective governance framework.
