Vietnam 20250320
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Headlines:
Banking Set for 16% Credit Growth
Economic Growth Gaining Steam
FDI Flows Remain Strong
Vietnam Joins Global AI Alliance
Banking Sector Reforms and Challenges
Digital Transformation Reaches Rural Areas
Export Markets Expand Globally
Semiconductor Industry Takes Root
US-Vietnam Partnership Hits New Highs
Tariff Challenges Hit Exporters
Renewable Energy Projects Expand
Private Sector Powers Growth
Visa Policy Reforms to Open Up for Tourism
Real Estate Market Sees Luxury Spike
Transportation Infrastructure
Regional Partnerships: LA, AU, SG
Defense and Security
Government Reforms Pick Up Pace
Banking Set for 16% Credit Growth
The State Bank of Vietnam has set a 16% national credit growth target for 2025, intending to pump 2.5 quadrillion VND in additional credit to fuel economic growth of up to 13%. The bank merged its branches into 15 regional offices told credit institutions to cut interest rates, focus on production and priority sectors, develop specialized credit products, and maintain risk monitoring. HSBC put up $12 billion to help Vietnam's shift to clean energy, with 22% of that money already funding wind power projects.
Read more: Nhandan (Credit Growth), VEN (Growth Target), Vietnam News (HSBC Commitment)
Economic Growth Gaining Steam
Vietnam wants the economy to grow 8% in 2025 and hit double digits yearly after that (see previous section for numbers as high as 13%). The World Bank thinks Vietnam's economy will grow 6.8% in 2025 and 6.5% in 2026. While exports might slow down, local business and services are expected to pick up the slack. UOB bank predicts 7% growth in 2025, possibly reaching 7.4% in 2026. The start of 2025 brought mixed results in hitting these targets.
Read more: The Investor (Investment Opportunities), Vietnam News (World Bank Forecast), VN Economy (UOB Forecast), The Investor (Mixed Performance)
FDI Flows Remain Strong
Manufacturing grabbed 68.3% (4.72 billion USD) of Vietnam's total 6.9 billion USD FDI in early 2025. February inflows hit $2.95 billion, up 5.4% year-on-year, with South Korea and Singapore leading the pack. Real estate took second place with $1.5 billion. Tech exports shined bright - computer and electronics shipments jumped 38.6% to $6.46 billion, while phone and parts exports grew 11.1% to $4.38 billion.
Read more: VEN (Manufacturing FDI), Vietnam Insiders (FDI Growth), VN Economy (Technology Exports)
Vietnam Joins Global AI Alliance
Vietnam has officially secured a spot in the AI Alliance, a global initiative founded by IBM, Meta, and leading academic institutions, at the AI-Semiconductor Conference 2025 in Hanoi. Six Vietnamese groups joined the coalition: FPT Software, National Innovation Center, CMC Software, SmartOSC, AI for Vietnam Foundation, Fulbright University Vietnam, and GenAI Fund. The Alliance promotes open-source AI development and research, and Vietnam’s admission will better position itself as a player in AI and semiconductor advancements.
Read more: VOV World (AI Alliance), Vietnam News (UK Partnership)
Banking Sector Reforms and Challenges
Foreign funds are pulling back from Sacombank - Finland's Pyn Elite Fund and Norway's Norges Bank cut their stakes while Amersham Industries sold its entire stake. Meanwhile, Sun Group pitched a 15-year rescue plan for troubled Saigon Joint Stock Commercial Bank (SCB), which needed $26 billion in central bank support after a 2022 bank run triggered by real estate mogul Truong My Lan's arrest. SCB's deposits plummeted from 669 trillion dong to just 19.2 trillion, with its capital adequacy ratio hitting minus 176% by late 2024.
Read more: The Investor (Investment Fund Changes), Investing.com (SCB Rescue Plan)
Digital Transformation Reaches Rural Areas
Digital tech is creating economic openings for ethnic minority and highland communities. Though tech skills and infrastructure remain weak, digital platforms now allow local products to be directly connected to markets. The healthcare sector is going digital nationwide with AI, big data, and blockchain implementation while building research capacity with medical institutions. From July 1, 2025, all businesses are expected to switch to electronic administrative procedures as part of Project 06, which builds a resident’s data systems in support of national digital transformation.
Read more: VEN (Highland Communities), TVBRICS (Healthcare Sector), VEN (Electronic Procedures)
Export Markets Expand Globally
International trade hit 786.29 billion USD in 2024 with exports up 14.3% and a trade surplus of 24.77 billion USD. Canadian trade flourished as exports reached $10.6 billion, a rise of 8.2%, making Vietnam Canada's 7th largest import partner. Businesses increasingly are using digital tools to reach global markets through platforms like Amazon, Alibaba, Shopee, and TikTok Shop. The Trade Office in Australia says that it’s working to expand access for Vietnamese products, with January bilateral trade topping US$1.5 billion.
Read more: Nhandan (Export Performance), Vietnam News (Canada Trade), Nhandan (Digital Transformation), Vietnam News (Australia Market)
Semiconductor Industry Takes Root
Vietnam was able to attract 174 FDI semiconductor projects worth $11.6 billion through 2024, including big investments from Amkor Group ($1.6B) and Hana Micron Group ($930M). The country wants to build a complete chip ecosystem and cut red tape. CT Group is building Vietnam's first semiconductor plant near Vietnam National University-Ho Chi Minh City, expected to open sometime this year. Lite-On Technology started work on a $690 million electronics factory in Quảng Ninh Province. Korean firms are betting big on Vietnam's tech future - Samsung is expanding while Amkor Technology tripled its chip factory investment from $1.2B to $3.6B.
Read more: Nhandan (Semiconductor Investments), Tuoi Tre News (First Semiconductor Plant), Vietnam News(Electronics Facility), VIR (Korean Investments)
US-Vietnam Partnership Hits New Highs
Prime Minister Pham Minh Chinh was keen to stress the value of US relations during talks with Ambassador Marc Evans Knapper as both countries celebrate 30 years of diplomatic ties. Their newly elevated Comprehensive Strategic Partnership saw bilateral trade reach nearly $150 billion in 2024. Trade Minister Nguyen Hong Dien's Washington visit resulted in $4 billion in business deals. Fruit and vegetable exports to the US hit $358.4 million in 2024, jumping 39% from 2023. Energy agreements worth $4.15 billion were finalized, covering LNG imports, oil and gas exploration, and petrochemical exchanges.
Read more: Eurasia Review (Strategic Partnership), MLex (Trade Deals), VnExpress (Fruit Exports), Energy News Pro(Energy Agreements)
Tariff Challenges Hit Exporters
The steel industry is in disarray as the US slapped a 25% tariff on steel imports starting March 12, 2025. The US market takes 13% of Vietnam's steel exports, ranking the third largest buyer. Apparel and footwear exports to the US also face uncertainty with tariff risks. Morgan Stanley flagged exposure for major brands like Nike, On, Allbirds, and Skechers. Vietnam has ramped up oversight of Chinese companies as they fears further US trade tensions due to President Trump’s return to office.
Read more: Nhandan (Steel Tariffs), Supply Chain Dive (Fashion Industry Tariffs), ThinkChina (Chinese Enterprise Scrutiny)
Renewable Energy Projects Expand
Quang Tri province plans to add 2,300 MW of wind power - 1,800 MW from 43 land projects and 500 MW offshore. Their power strategy includes 260.5 MW of hydropower, 119.6 MW of solar, and 23 MW of rooftop solar. Green credit has boomed to 680 trillion VND (4.3% of total debt). Participating institutions jumped from 5 in 2017 to 50 today, funding organic farming, renewable energy, and sustainable aquaculture. Construction started on a 7.4 trillion VND, 500kV transmission line in northern Vietnam, expected to run 229.5 km across four provinces.
Read more: The Investor (Wind Power), Nhandan (Green Credit), VN Economy (Transmission Line)
Private Sector Powers Growth
The private sector now drives 51% of Vietnam's GDP and employs more than 40 million people (82% of the workforce). It accounts for nearly 60% of social investment, and is expected to reach 70% of GDP by 2030. Most private firms remain small with limited financial and innovation muscle. At the Vietnam Economic Forum 2025, experts identified institutional barriers as the main roadblock to growth, saying that to hit the governments 8% target requires at least a 30% cut in red tape. Prime Minister Pham Minh Chinh has ordered a crackdown on waste to optimize state resources and support economic development.
Read more: Vietnam News (Private Sector Role), VEN (Institutional Reform), VEN (Resource Optimization)
Visa Policy Reforms to Open Up for Tourism
Vietnam now offers 45-day visa-free stays to citizens from 15 countries including Germany, France, UK, Russia, Japan, and South Korea. The policy runs from March 15, 2025 to March 14, 2028. Prime Minister Pham Minh Chinh has asked the Ministry of Public Security to explore letting foreigners buy temporary residence cards. The plan includes reviewing visa rules for tourists, experts, billionaires, scientists, celebrities, and athletes. The government says it wants to craft visa reforms targeted at wealthy international travelers and investors, with specific exemptions for billionaires, global experts, and top entrepreneurs.
Read more: VEN (Visa Exemptions), Tuoi Tre News (Residence Cards), Vietnam Insiders (Wealthy Travelers)
Real Estate Market Sees Luxury Spike
Luxury real estate is set to nearly double from $4.14B in 2025 to $7.84B by 2030, growing at 13.65% yearly. The boom is supported by a 12% annual increase in wealthy individuals, solid economic growth, and prices 30-40% below regional alternatives. The broader property market looks bright for 2025, with foreign investment and M&A activity heating up. Government infrastructure spending (8% of GDP) and lower interest rates are also favorable conditions. The southern market, however, has crashed - with just 1% of available villas and townhouses sold in 2025. From 5,000 units in HCMC and nearby provinces, only 75 found buyers, down from last year's 16% take-up rate.
Read more: IBTimes (Luxury Real Estate), The Investor (Market Growth), VnExpress (Southern Market Slump)
Transportation Infrastructure
Phu Quoc Island is getting a makeover in advance of the 2027 APEC meeting. The international airport will get a new 3.3km runway, a second terminal, and capacity for 20 million passengers with parking for 70 aircraft over 1,073 hectares. The HCMC Ring Road 3 Project's elevated section is expected to be finished by April 2026, which would be ahead of schedule. Ten construction segments are halfway done, with final stretches targeted for June 2026. HCMC's first metro line, running since December 22, 2024, has caused a boom in food and beverage businesses near stations.
Read more: Tuoi Tre News (Phu Quoc Projects), Global Highways (Transport Infrastructure), Tuoi Tre News (Metro Line Impact)
Regional Partnerships: LA, AU, SG
Vietnam and Laos are promoting payments in their local currencies. The move is intended to cut reliance on foreign currencies and lower transaction costs by using Lao kip and Vietnamese dong. Vietnamese Ambassador Pham Hung Tam visited South Australia to strengthen ties, with trade between them reaching AUD837 million in 2024. South Australian leaders see Vietnam as a potentially strong partner for education, science, tech, innovation, low-carbon agriculture, and digital transformation. Vietnam and Singapore upgraded to a Comprehensive Strategic Partnership in 2025, building on $23.5 billion in bilateral trade. Singapore remains Vietnam's top foreign investor at 30% of FDI.
Read more: VEN (Vietnam-Laos), VEN (Vietnam-Australia), ASEAN Briefing (Vietnam-Singapore)
Defense and Security
Vietnam is crafting its first UN peacekeeping law with 5 chapters and 29 articles. The legislation sets policies and cooperation mechanisms while expanding participation beyond the military to include government officials and civil servants. Since 2014, Vietnam has sent nearly 1,100 officers to missions in South Sudan, Central African Republic, and Abyei, signing agreements with UN Security Council members. Prime Minister Pham Minh Chinh has called for the defense industry to lead national industrial development, pushing for an independent, modern sector through the use of resolutions focused on mastering advanced tech, workforce training, and special development policies.
Read more: VOV World (UN Peacekeeping), VEN (Defense Industry)
Government Reforms Pick Up Pace
Party Secretary To Lam has ordered 220 longstanding complaint cases resolved by mid-2025 to build public trust through legal compliance, protecting citizens' rights, recovering state assets, and taking disciplinary action where needed. Leading experts have spoken out about critical administrative reforms to cut bureaucratic barriers, digitize processes, and create a more business-friendly environment. The newly-merged Ministry of Agriculture and Environment is facing a staffing crisis as 717 employees have resigned and another 283 plan to leave pending financial compensation. New retirement rules under Decree No. 67/2025/NĐ-CP now let officials within 2-5 years of retirement age opt for early retirement without pension penalties.
Read more: VEN (Complaint Resolution), Tuoi Tre News (Administrative Reforms), Tuoi Tre News (Workforce Reduction), Evrimagaci (Retirement Policies)
That’s it for this week!
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