Vietnam 20250116: Maximalist, Discreet, Bright
Mekong Memo Vietnam Weekly: Business, politics, finance, trade & legal news.
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Headlines:
Heady Growth Plans Drive Economic Strategy
International Financial Center Takes Shape
Digital Technology Push Gains Speed
Banking Sector Sees Green
Nuclear Power Plans Fast-Tracked
Trade Relations Roundup
Infrastructure Investment Continues
Aviation Growth in the Air
Foreign Investment Patterns Shift
Ag Exports Target Growth
Energy Policy Updates
Logistics Sector Modernization
Transportation Links Strengthen
Six Countries, One Destination
Heady Growth Plans Drive Economic Strategy
The target for growth is 10% GDP growth in 2025, with domestic consumption and public investment expected to be the main drivers. The government was able to manage a 7.09% growth in 2024, beating targets while keeping inflation at 3.63%. UOB raised its 2025 growth forecast to 7%, mostly crediting strong momentum. State budget revenues hit $84.9 billion in 2024, up 16.2% year-over-year, with a surplus of $8.62 billion. The government plans record infrastructure spending, including the completion of 3,000km of expressways growing to a planned 5,000km by 2030.
Read more: VN Economy (Growth Drivers), VN Economy (UOB Forecast)
International Financial Center Takes Shape
Ho Chi Minh City's development into an international financial center is picking up speed with a new steering committee being formed under PM Chinh. The plan will require reforms including the development of a more complete financial transaction ecosystems, an improved digital infrastructure framework, and legal scaffolding to support the whole thing. Current market metrics show room for growth - HoSE's market-cap-to-GDP ratio is 70%, below regional peers Thailand (104.2%) and Malaysia (93.7%).
Read more: Tuoi Tre News (Reform Requirements), VN Economy (Committee Formation)
Digital Technology Push Gains Speed
The Governements new “Resolution 57” is planned to drive Vietnam into the ranks of Southeast Asia's top three countries for digital technology R&D by 2030. The resolution prioritizes science, technology, and digital transformation, with plans to develop at least five globally competitive digital technology firms. Digital payments are showing strong take-up - NAPAS processed 9.56 billion transactions worth $2.4 trillion in 2024, with instant transfers growing by a third year on year.
Read more: VN Economy (Technology Forum), VIR (Digital Payments)
Banking Sector Sees Green
Four major state-run banks were able to achieve a combined pre-tax profits of almost $5 billion last year. Vietcombank led with $1.71 billion, followed by BIDV ($1.18 billion), Agribank ($1.08 billion), and VietinBank ($1.03 billion). The banking sector saw 15.08% credit growth, edging past the 15% target, with outstanding loans reaching a standing tally of $614.6 billion.
Read more: Tuoi Tre News (Bank Profits), Nhan Dan (Credit Growth)
Nuclear Power Plans Fast-Tracked
Prime Minister Phạm Minh Chính has mandated completion of Vietnam's first nuclear power plant within five years, targeting operations by 2030. The newly established Steering Committee for Nuclear Power Plant Construction is expected to oversee the Ninh Thuận province project. The project will be in support of the 15-18% electricity growth needed for double-digit GDP expansion.
Read more: Vietnam News
Trade Relations Roundup
US-Vietnam trade reached $132 billion in 2024, with Vietnam's exports at $119 billion. Vietnam-China trade topped $205 billion, creating an $82.8 billion deficit. The UK's CPTPP membership will open new opportunities in the consumer goods, technology, and machinery sectors. Trade defense investigations increased, with Vietnamese goods facing about 270 cases across 25 markets.
Read more: Vietnam News (US Trade), VIR (Trade Defense)
Infrastructure Investment Continues
Hanoi has approved an Urban Development Program through 2035 that is going to require a heady $118 billion in investment. The plan is shooting for 65-70% urbanization and 30% modern public transport usage by 2030. Thailand's WHA Group announced has announced a substantial $1 billion investment in Vietnamese industrial real estate over the next five years, developing eco-industrial and smart parks with an intent to pull in as much as $5 billion in secondary investments.
Read more: VN Economy (Hanoi Development), Vietnam News (Industrial Parks)
Aviation Growth in the Air
Vietnam Airlines and Lao Airlines have committed to cooperation with a new memorandum of understanding. The agreement includes Vietnam Airlines providing technical support for Lao Airlines’ Airbus fleet and collaboration in cargo transport and staff training. Đà Nẵng International Airport has set out its upcoming growth strategy, having hosted 13.4 million passengers and handling over 32,000 tonnes of cargo last year. Future plans include a new cargo terminal, operational by EOY, to accommodate 100,000 tonnes annually, along with service upgrades to meet international standards.
Read more: Vietnam Economic Times (Airline Partnership), Vietnam News (Da Nang Expansion)
Foreign Investment Patterns Shift
Singapore was the leader in foreign direct investment with $10.2 billion in 2024, followed by South Korea tipping the scales at a hair over $7 billion. Japan's investment declined from $6.56 billion to $3.5 billion. Vietnamese outbound investment reached $664.8 million to 31 countries, up 57.7% year-over-year, with Laos, Indonesia, and India being the top destinations.
Read more: VIR (Inbound FDI), VN Express (Outbound Investment)
Ag Exports Target Growth
The fruit and vegetable sector is expecting $8 billion exports in 2025 and $10 billion by 2030, following $7.2 billion in 2024. Shrimp exports hit $4 billion on recovering demand, with projections of $4.3-4.5 billion for 2025. The pangasius industry is looking for $2 billion in 2025 exports, supported by 240,000 broodstock and 1,920 production facilities.
Read more: VN Express (Fruit/Veg), VN Economy (Pangasius)
Energy Policy Updates
The Ministry of Industry and Trade has proposed reducing electricity price adjustment intervals from three to two months, with changes triggered by 2% cost fluctuations. More than 100,000 rooftop solar power projects have been installed nationwide, which makes up more than 50% of total solar capacity. New regulations are focused on self-production and consumption rather than professional investment.
Read more: Nhan Dan (Electricity Pricing), VIR (Solar Power)
Logistics Sector Modernization
The logistics industry is expecting breakthrough growth for the year ahead, focusing on technology improvements, green logistics, and improved e-commerce integration. The sector will keep 14-16% annual revenue growth in a $40-42 billion market. Digital transformation continues to be as important as ever, though companies still are dealing with the obstacles of limited capital and inadequate skilled staff.
Read more: VN Economy
Transportation Links Strengthen
Vietnam Airlines and Lao Airlines signed an MOU expanding technical cooperation and cargo services. The partnership includes maintenance services for Airbus A320/321 fleet at Wattay and Luang Prabang airports. Estonian ride-hailing startup Bolt enters Vietnam's $880 million market, offering transport, grocery, and food delivery services.
Read more: VN Economy (Airlines), Vietnam News (Ride-Hailing)
Six Countries, One Destination
Vietnam and Thailand continue to talk about tourism collaboration under the "Six Countries, One Destination" initiative. The program is being touted as a way to simplify visa operations and grow regional travel across Cambodia, Laos, Malaysia, Myanmar, Thailand, and Vietnam.
Read more: Travel Daily Media
That’s it for this week!
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