Despite facing several risks-particularly the possibility of high tariffs from the U.S.-Vietnam’s economy sustained a positive growth trajectory in 2025 and entered 2026 on solid footing. Yet the greatest challenge ahead lies in execution capacity.

Answering the skeptics

When the U.S. announced plans for steep tariffs targeting Vietnam, doubts surged over whether the country could meet its bold economic targets set at the beginning of 2025.

However, macroeconomic data has since shown robust GDP growth in the second and third quarters of 2025, with each quarter outperforming the last. Despite an unpredictable global trade environment, Vietnam’s industrial production index (IIP) rose by 10% year-on-year in Q3, with growth seen across various sectors.

According to Vu Binh Minh, Head of Capital and Currency Trading at HSBC Vietnam’s Markets and Securities Services Division, Vietnam’s electronic products surpassed light manufacturing exports to become the country's top export to the U.S. in 2025. The country has significantly upgraded its capabilities in final assembly of electronic goods, reflecting its gradual climb up the tech value chain.

Although Vietnam still operates largely in the lower segments of the global supply chain, the growing demand for AI has positively impacted export volumes, particularly in consumer electronics and smartphones.

Additionally, Vietnam is playing an increasingly vital role in the global semiconductor manufacturing chain-a sector with much higher value-add than simple assembly.

Citing a credible market report, Minh noted that by August 2025, Vietnam accounted for about 75% of all gaming console exports to the U.S. Monthly exports surged from under $30 million in 2024 to over $400 million by mid-2025.

International recognition of progress

These encouraging signs are echoed by global consulting firms. In its newly published “Vietnam Outlook 2026” report, KPMG Chairman and CEO for Vietnam and Cambodia, Warrick Cleine MBE, described 2025 as a turning point for Vietnam. What makes this moment transformational, he said, is the convergence of bold domestic reforms and visionary national plans.

Among these are Resolution 68 and the launch of the International Financial Center initiative, highlighting Vietnam’s ambition to become a regional financial hub. The national semiconductor industry development strategy also sets the stage for Vietnam to become a key player in the global chip ecosystem.

Most notably, the private sector is being empowered like never before, with reforms aimed at unlocking its full potential.

According to Cleine, these initiatives are not isolated, but interconnected-driving Vietnam’s shift toward high-value industries, digital transformation, and inclusive growth. For investors, the message is clear: Vietnam is open, ready, and moving fast.

The real challenge: Execution

Although developments in 2026 remain hard to forecast, key indicators such as the Purchasing Managers’ Index (PMI) hint at an optimistic outlook.

The overall PMI held steady at an expansionary 53.8 in November 2025. Notably, new export orders grew at an accelerating pace for the second consecutive month.

In recent months, Vietnam has stepped up public investment, especially in critical infrastructure. Public spending in this area accounts for about 6–7% of GDP, significantly higher than in regional peers. This has become a major driver of economic growth, especially amid rising global trade risks.

Trade diversification has also become a strategic priority in light of U.S. tariff uncertainties.

According to Minh, while the U.S. remains Vietnam’s largest export market, the country is actively pursuing long-term trade opportunities elsewhere.

In 2024, trade with the EU grew by 36% compared to 2019, making Vietnam the EU’s most important trade partner in ASEAN. Furthermore, the country has signed and implemented 17 free trade agreements and upgraded relations with several major economies, underlining the vast potential of its diversification strategy.

Seizing the moment

Associate Professor Vo Dai Luoc, former Director of the Institute of World Economics and Politics, said that by the end of 2025, Vietnam had established comprehensive strategic partnerships with all five permanent members of the UN Security Council-namely the U.K., France, Russia, the U.S., and China.

In addition, Vietnam’s extensive trade network now spans the globe through 17 free trade agreements, offering deep economic linkages.

Domestically, landmark policy resolutions such as Resolution 68 on private sector development and Resolution 57 on science, technology, innovation, and digital transformation were issued at just the right time.

Reflecting on Vietnam’s achievements in 2025, Luoc affirmed: “Vietnam’s international environment in 2026 is exceptionally favorable-arguably the best it has ever been.”

However, the key issue remains how well these policies are implemented.

“The outlook for 2026 is undeniably positive. But to achieve the projected double-digit growth, policy execution must become reality,” Luoc told VietNamNet.

For example, the spirit of Resolution 68 must be codified into concrete laws. Previously, state-owned and foreign-invested enterprises were given priority in Vietnam’s economic system, with private businesses coming last. Now, private enterprises must receive clear, substantial priority in legal frameworks-rather than being lumped into generic policies.

Talent development strategies also deserve more attention.

Luoc cited China’s aggressive efforts to attract top global talent, including incentives to lure overseas experts back home with competitive compensation packages. Though costly, the economic returns are substantial.

At the 4th Vietnam Economic Forum on December 31, 2025, Professor Nguyen Duc Khuong, a member of the National Advisory Council for Science, Technology, Innovation, and Digital Transformation, proposed several international models Vietnam could adopt to improve policy implementation.

Singapore is considered a global benchmark in this regard, known for strong coordination from the Prime Minister’s Office and Ministry of Finance, a highly accountable civil service, and a meritocratic approach to human capital.

South Korea exemplifies the “developmental state” model, where the government and private sector work closely on long-term industrial strategies. The country also excels at rapidly deploying infrastructure, education, and technology programs, with rigorous oversight of priority projects.

Japan’s strength lies in its institutional discipline and policy continuity, unaffected by political cycles. It also benefits from a technically competent civil service and effective consultation mechanisms among the government, business community, and academia.

Meanwhile, China demonstrates capacity to execute large-scale infrastructure projects through a clear division of responsibilities from central to local governments, often using a pilot–scale-up model.

Tran Chung