When asked to define 2025 and share expectations for the year ahead, I confidently responded with three keywords: “Impressive,” “Foundational,” and “Breakthrough.”

The year 2025 unfolded amid a complex international environment, with challenges outweighing tailwinds. However, there were three major advantages: the global economy sustained growth at around 3.2%, similar to 2024; inflation continued to ease and interest rates fell, stimulating investment, consumption, and business activity; and trends in green transition, digitalization, energy restructuring, institutional reforms, and infrastructure investment progressed, even as some governments adjusted their approach to climate goals.

Still, 2025 was marked by significant disruptions: geopolitical conflicts, intensifying strategic competition in trade and technology, growing protectionism and tariffs, a slowdown in major economies like the US, China, and parts of Europe, rising risks in energy security, supply chains, cybersecurity, and economic crimes, as well as sharp fluctuations in exchange rates, gold, and crypto assets. Climate change and extreme weather also added to global uncertainty.

These risks are expected to persist in 2026, making the landscape more unpredictable - offering both opportunities and challenges, especially for highly integrated economies like Vietnam.

Domestically, 2025 delivered many “impressive” results amid external turbulence and internal shifts. A notable highlight was the decisive institutional restructuring led by the Party and State: streamlining ministries, departments, and provincial governments, and piloting a two-tier local government model - moves widely supported by citizens and businesses.

Breakthrough policies were introduced across key sectors, including science and technology, international integration, private sector development, energy security, education, healthcare, and special mechanisms for major cities and provinces. These laid a strong political foundation for future development.

Fiscal measures such as tax and fee reductions, monetary policies to stabilize interest rates and exchange rates, debt restructuring, and credit accessibility were implemented. Landmark laws and special resolutions passed by the National Assembly aimed to resolve bottlenecks and catalyze growth. These policies helped citizens and businesses navigate unprecedented hardships, drive recovery, and establish a legal framework for fast, sustainable, and inclusive growth.

As a result, Vietnam’s economy rebounded strongly, with each quarter outperforming the last. Full-year GDP growth is estimated at 8%, and the 2026–2030 period is targeting over 10% annual growth - an ambitious goal given the global slowdown.

Macroeconomic stability was largely maintained: inflation stayed within control at around 3.4%, basic interest rates remained steady (though recently inching up), and both exchange rates and bad debt levels stayed manageable. Major balances - trade, budget, savings and investment, public and foreign debt, social welfare, food and energy security - were kept at safe levels, often more favorable than peer countries.

Public investment, private enterprise, and foreign direct investment (FDI) were actively promoted. Science and technology, digital transformation, green and circular economy initiatives, and energy transition advanced rapidly. High-tech projects, including semiconductors, AI, and data, were attracted. Cashless payment adoption soared, and green finance and consumption gained attention. Adjustments to the Power Development Plan VIII supported energy security and gradual greening. New financial centers, free trade zones, carbon markets, and crypto markets were established. The stock market was upgraded - providing both traditional and emerging engines of growth.

Business activity clearly rebounded, though unevenly. The ratio of businesses exiting the market versus new entrants dropped from 1.23 in Q1 2024 to 0.75 by the end of 2025.

State budget revenue surpassed expectations, reaching 130% of the projection - an estimated 17% increase - reflecting strong recovery in exports, production, and consumption, along with diversified revenue sources. This created fiscal space for wage reforms, and for continuing reforms in education and healthcare.

International relations and integration recorded key achievements. High-level visits strengthened diplomatic ties, several strategic partnerships were upgraded, and new and ongoing FTA negotiations deepened global cooperation.

Nonetheless, the economy faces persistent challenges. Growth drivers remain uneven. Exports have slowed since August 2025, affected more by new US tariffs. The share of exports from domestic enterprises fell from 28% in 2024 to 23.2% in 2025, while FDI's share rose. Public investment disbursement remains sluggish - only 80% of the plan was reached by December, with hopes to hit 95% by January 2026, still below the 100% target.

Private investment rose 8.5% from 7% in 2024 but still lags the 15–17% pre-COVID benchmark. Final consumption rose 8% from 7% in 2024, but retail sales are only 80% of pre-pandemic levels, signaling weak demand. Bad debt increased slightly despite rescheduling policies - evidence that businesses and borrowers remain under strain, worsened by three historic storms.

The real estate market is recovering but remains fragile. Property prices are rising, and supply-demand imbalances persist. Interest rates are trending upward as credit grows faster than deposits (18.5% vs. 14.5%) due to competition from other investment channels. Exchange rate and gold market volatility is intensifying, narrowing monetary policy space. State-owned enterprise (SOE) and weak credit institution restructuring is lagging.

Fiscal sustainability is a concern, with over 20% of budget revenue coming from land use - projected to reach 25% in 2026. This raises the urgency for restructuring the economy and state budget in the context of high growth.

Another challenge lies in the quality of legislation and enforcement. Many policies are issued simultaneously, making implementation difficult. The two-tier local government model and the formalization of household businesses face regulatory hurdles.

Growth quality remains low. Although labor productivity grew 6.8% in 2025 (up from 5.5% in 2024), gains are uneven. The ICOR (Incremental Capital-Output Ratio) remains high at 5, reflecting inefficient investment. Economic self-reliance is modest, with average domestic content across industries at only 36.6%.

As 2026 begins, global outlooks are mixed, but risks and uncertainty are rising. This threatens Vietnam’s exports, investment inflows, and energy transition - on top of internal pressures. The government targets 10% growth and 4.5% inflation in 2026. These are ambitious goals, requiring reform, resource mobilization, and performance far beyond 2025 levels to achieve sustained double-digit growth through 2030.

Still, citizens and businesses have good reason to hope - provided key conditions are met.

First, Vietnam must remain steadfast and bold in ongoing reforms, especially institutional breakthroughs, streamlined governance, and two-tier administration, aligned with wage and HR reforms.

Second, implementation must improve - especially public service efficiency and consistent policy enforcement across all levels.

Third, the growth model must shift from capital and labor-intensive to one driven by technology, digitalization, productivity, and reform. Both traditional and emerging drivers - backed by key strategic resolutions - must be fully activated.

Macroeconomic stability should remain a top priority, along with accelerating the green and digital transitions, building climate resilience, and addressing the remaining weak enterprises and credit institutions. These “blood clots” continue to distort resource allocation and impose high economic costs.

Public investment should be restructured - currently, 80% goes to infrastructure, while science, education, and healthcare remain underfunded. Budget restructuring should diversify revenue and reduce reliance on land.

Real estate prices must be stabilized, and financial markets reformed to better mobilize capital, relieve pressure on bank credit, and diversify funding sources. Capital allocation must become more efficient. The plan to boost economic resilience and self-sufficiency must be consistently implemented.

These decisions are already underway, with encouraging early results. Therefore, we have every reason to believe in a successful “breakthrough” in the year ahead - and beyond.

Dr. Can Van Luc