Vietnam 20250327
Mekong Memo Vietnam Weekly: Business, politics, finance, trade & legal news.
Business stories from Southeast Asia directly to your inbox.
The Mekong Memo is proudly presented by:
Horton International is your premier partner for executive search in Southeast Asia. Whether you're a small startup or a global corporation, our reliable and effective recruiting solutions are tailored to meet your unique needs. With extensive experience and offices across the region, we excel at overcoming recruitment challenges and securing top talent for your organization.
Click here to learn how Horton can make your life easier.
Headlines:
Small Businesses Lead APAC in Digital Growth
Private Sector Growth for Transformation
Public Investment Acceleration to Hit Targets
FDI Growth Shows Positive Signs
M&A Led by Real Estate, Healthcare, Education
Higher Inflation Supports Real Estate and Retail
Gold Prices Double Over Three Years
Banking Raises Capital for Basel III
Semis and AI Gain Momentum
Financial Center Development Push
Relations With Singapore Shored Up
Affordable Housing Drive Gains Momentum
Strong Investment Potential in Real Estate
Infrastructure for Trade and Transportation
Financial Technology Developments
Power Generation Landscape Reshaping
Ag Exports See Growth with Adaptation
Automotive Expansion Accelerates with FDI
Mobile World Investment Reports Strong Numbers
Small Businesses Lead APAC in Digital Growth
Small businesses are racing ahead with tech adoption. As of the end of last year, just under half are investing in AI - twice as many as year before. Nearly 90% of SMEs make more than 10% of their money online, while 84% use digital payment platforms. This digital push, led by tech-savvy business owners, is paying off in a big way: 82% of businesses grew in 2024, with 92% expecting to expand in 2025 and 93% feeling good about the national economy. The optimism comes even as 60% faced cyberattacks in 2024 and 68% believe that they'll be targeted again.
Read more: Vietnam Insiders (AI adoption), VN Economy (Business growth)
Private Sector Growth for Transformation
Officials want the Vietnamese private sector to make up 70% of GDP by 2030 and create two million private businesses as it works towards becoming a high-income country by 2045. Prime Minister Pham Minh Chinh ordered a 30% cut in administrative processing times and simpler business rules to support small and medium businesses. The changes are the result of real problems - 60% of businesses struggle with funding and more than half say they face bureaucratic roadblocks. The government is focusing on market-friendly management, protecting property rights, fair competition, and better lending options.
Read more: Vietnam News (GDP contribution), VEN (SME development), VEN (Private sector strategy)
Public Investment Acceleration to Hit Targets
Public investment spending, which hit 72.9% of targets in 2024, is expected to be accelerated so the country can reach its big 8% GDP growth goal for 2025. The government has set aside VND875 trillion ($35 billion) for public investment in 2025 - a 37.7% lift over the 2024 numbers. Budget changes include raising development investment to 31% while cutting regular spending to below 60%, with the budget deficit potentially rising to as much as 4.5% of GDP. Major projects include the North-South Expressway, Long Thanh International Airport, and Tan Son Nhat Airport Terminal 3.
Read more: VN Economy
FDI Growth Shows Positive Signs
The country pulled in $6.9 billion in foreign direct investment in early 2025, up more than a third over last year’s number. While brand-new FDI projects dropped 48.4% to $2.19 billion, additional money for existing projects shot up six times to $4.18 billion, and foreign capital contributions grew almost nine-fold to $529.8 million. South Korea currently is leading the pack with $1.47 billion invested, followed by Singapore ($1.4 billion) and China ($850 million). Manufacturing dominates, grabbing $4.51 billion (70.8% of total FDI), with growing interest in semiconductors, green energy, EV batteries, and biotech.
Read more: VN Economy
M&A Led by Real Estate, Healthcare, Education
Mergers and acquisitions deals are gaining steam, with real estate, healthcare, and education leading the way. Cash-rich players are jumping in, with Japanese and Singaporean investors showing especially strong interest. Government rules have become friendlier to foreign investment, even allowing 100% foreign ownership in schools, for example. The activity comes from FDI growth, government reforms, and rising interest in green energy, digital transformation, infrastructure, and healthcare from both local and international investors.
Read more: Vietnam Insiders (Sector trends), VIR (Market outlook)
Higher Inflation Supports Real Estate and Retail
The government is pushing an expansionary economic policy targeting 8% GDP growth in 2025, accepting some inflation as part of the plan. The strategy includes 16% credit growth and a flexible monetary policy. Real estate and construction are expected to benefit from easier credit and more public spending, while retail and consumer goods should see higher consumer spending. The government wants to keep inflation below 5% while wrapping up current infrastructure projects and lifting industrial production.
Read more: The Investor
Gold Prices Double Over Three Years
Gold prices in Vietnam have doubled from VND50 million to VND100 million per tael in just two and a half years. The climb began in July 2020 during COVID-19 uncertainty when prices first hit VND50 million, reaching VND100 million in March 2025. Global economic uncertainty, U.S. Federal Reserve interest rate policies, geopolitical tensions, and central banks buying more gold have all pushed prices up. Goldman Sachs thinks gold could reach as high as $3,200 by year-end, with recent investments yielding 66.6% returns in 1.5 years and 100% in 2.5 years.
Read more: VNExpress
Banking Raises Capital for Basel III
Some of the biggest banks are boosting their capital through stock dividend issuances to meet Basel III requirements. Vietcombank plans to grow from VND55.89 trillion to VND83.56 trillion, while VietinBank says it plans an increase from VND53.7 trillion to VND77.67 trillion. BIDV wants to exceed VND70.2 trillion, with Military Bank, SHB, and Nam A Bank making similar moves. The capital increases will help the banks comply with Basel III rules, improve risk management, increase lending capacity, and fund technology investments, all with guidance from the State Bank of Vietnam.
Read more: The Investor
Semis and AI Gain Momentum
Vietnam is trying to climb the ladder in global AI and semiconductor industries. The country wants 8% annual growth by 2025, with AI expected to add $79.3 billion to the economy by 2030. Plans include training 50,000 semiconductor professionals and 5,000 AI specialists by 2030, backed by partnerships with Nvidia, Honeywell, and FPT Corporation. Google DeepMind AI researcher Le Viet Quoc says Vietnam should create, not copy, in AI development, focusing on open-source contributions and building talent through better education and research.
Read more: Vietnam News (Partnerships), VNExpress (Innovation), Tuoi Tre News (Engineering Demand)
Financial Center Development Push
Headway is being made toward improving the local standing of international financial centers, with Ho Chi Minh City climbing seven spots to rank 98th among 119 global financial centers. The city's rise comes along with an ambitious plan to build a financial center in the Thu Thiem urban area, backed by partnerships with several international organizations including the European Central Bank. Vietnamese experts in the UK have drawn up a development strategy that centers on transparency, workforce development, infrastructure, strong financial markets, and international branding, with specialized areas including asset management, fintech, and green finance expected to grow.
Read more: Vietnam News (Ranking), VN Economy (Performance), The Investor (Development Blueprint), VIR (ECB partnership)
Relations With Singapore Shored Up
National Assembly Chairman Tran Thanh Man and Party General Secretary To Lam met with Singaporean Prime Minister Lawrence Wong to advance their new Comprehensive Strategic Partnership. The talks highlighted big achievements, including trade reaching $10.3 billion in 2024 and Singapore's total investments exceeding $80 billion. The leaders focused on expanding work in digital transformation, AI, green economy, and renewable energy, while creating regular exchange programs and finalizing an Action Plan for 2025-2030.
Read more: VEN (Singapore partnership), VEN (Partnership implementation), VN Economy (Semiconductor cooperation)
Affordable Housing Drive Gains Momentum
Vientam wants to build 1 million social housing apartments by 2030, especially in locations in and around industrial parks. Developers like Becamex, Hoa Phat, and Tran Anh Group are investing in these projects, which typically offer 30-square-meter apartments priced between VND100-300 million ($4,000-12,000) with flexible payment options. The plan is required to address housing needs for Vietnam's 430 industrial parks, which employ about 8 million workers. Vingroup has been picked to build 500,000 housing units in a $36 billion project, tackling housing shortages and concerns about the shrinking working-age population.
Read more: VIR (Developer Incentives), Global Construction Review (Mass Housing)
Strong Investment Potential in Real Estate
The real estate market continues to look promising, backed by 7%+ GDP growth in 2024 and expected 6.5-6.6% growth in 2025. The market is warming up, with Hanoi apartment prices jumping 22.3% year-on-year, while new land and housing laws have made investing more transparent. The best investment opportunities are reportedly industrial parks, logistics facilities, premium office spaces, and homes in fast-growing urban areas. Hotels are also doing particularly well, with occupancy up 15 percent and room rates increasing 5%, mostly in luxury properties.
Read more: Vietnam Briefing (Investment Potential), VIR (Hospitality Growth)
Infrastructure for Trade and Transportation
Infrastructure continues to be built out to support economic growth and improve logistics. The VSICO Quang Tri Dry Port, a VND236 billion ($9.2 million) project covering 8.6 hectares, is expected to handle 50,000-100,000 TEUs of container cargo and one million tonnes of bulk goods yearly at the Lao Bao International Border Gate. In Ba Ria-Vung Tau, the Long Son My Xuan General Port Project got approval with a $93.3 million investment, featuring a 270m main berth for 30,000 DWT ships and four smaller berths for vessels up to 7,500 DWT. The 991B Road project in the same area is being fast-tracked with VND3.9 trillion ($151 million) to improve cargo transport to the Cai Mep-Thi Vai port complex.
Read more: VN Economy (Dry Port), The Investor (Port Investment), VN Economy (Roads)
Financial Technology Developments
Big changes are afoot in the digital finance and crypto markets. The Finance Ministry has launched a pilot program for cryptocurrency regulation with joint oversight from the Finance Ministry, Public Security Ministry, and State Bank. The program fixes Vietnam's lack of crypto laws while also allowing for the monitoring of exchanges and reduction of risks. Meanwhile, Cake Digital Bank broke even in December 2024 by serving overlooked financial needs, attracting 5 million customers with quick loans and low-limit credit cards. The bank runs on more than 60 AI models and has built up $352 million in savings deposits while doubling payment transactions to $4.7 billion.
Read more: VIR (Regulation), Asian Business Review (Digital Banking)
Power Generation Landscape Reshaping
SCG Chemicals plans to add $400 million to its petrochemicals complex in Ba Ria-Vung Tau province, while signing a 15-year deal for two more Very Large Ethane Carriers to bring ethane from the US. The company expects 30% cost savings compared to naphtha prices and lower greenhouse gas emissions. Tarriffs are being cut on US energy imports, with LNG tariffs dropping from 5% to 2% and ethane tariffs being removed entirely. A group of 28 renewable energy investors has asked the government to reconsider planned changes to feed-in tariff pricing for solar and wind projects, as they worry about the effects it will have on $13 billion in investments.
Read more: The Investor (Petrochemicals Investment), Energy Intel (US Energy Tariffs), VIR (Renewable Energy Tariffs)
Ag Exports See Growth with Adaptation
Seafood exports hit $1.42 billion in the first two months of 2025, growing 18.2% year-on-year, helped by new trade deals including CPTPP, EVFTA, and RCEP. Rice exports are seeing headwinds February figures reaching 560,000 tonnes even as average export prices fell 18.3% year-on-year to $553.6 per tonne, with a bounce-back expected in Q2 2025. The cocoa industry is making a comeback in Dak Lak and Dak Nong Provinces through a 1.9 million euro EU program supporting circular economy practices, with bean prices jumping as much as VND30,000 to VND80,000 per kilogram. Vietnamese farm cooperatives are also shifting toward sustainable farming to meet international market demands, using VietGAP and organic farming standards.
Read more: VEN (Seafood exports), VEN (Rice exports), Tuoi Tre News (Cocoa revival), Fresh Plaza (Sustainable farming)
Automotive Expansion Accelerates with FDI
China's Geely Auto launched in Vietnam on March 21st, bringing three models including the Coolray SUV (538-628 million VND), an electric EX5 SUV (218 horsepower, 430km range), and the premium Monjaro SUV. The company is setting up 15 dealerships to start, and has plans for 50 locations by the end of 2025, while investing $168 million in a vehicle assembly plant in Thai Binh province for production beginning in 2026. Skoda Auto has built a production facility in Quang Ninh province through a partnership with Thanh Cong Group to assemble the Kushaq SUV and Slavia sedan using parts imported from India, with current operations through 15 sales outlets and plans to expand to 32 dealerships by the end of this year.
Read more: Vietnam Insiders (Geely), NDTV (Skoda)
Mobile World Investment Reports Strong Numbers
Mobile World Investment Corporation (MWG) posted strong results for early 2025, with total revenue of VND24.52 trillion ($959.5 million), averaging VND416 billion ($16.44 million) daily - a 13.5% increase from last year. Online sales made up VND1 trillion ($39.13 million), about 6% of total revenue. The company's Mobile World and Dien May Xanh chains brought in VND17 trillion ($665.17 million), while Bach Hoa Xanh food chain earned more than VND7 trillion ($273.89 million), growing 16% year-on-year. Even after closing 221 stores since February 2024, MWG added 94 Bach Hoa Xanh stores for a total of 1,864 locations and signed a $50 million deal to develop the EraBlue electronics chain in Indonesia.
Read more: The Investor
That’s it for this week!
Your voice matters to us. Feel we're missing something? Have additional sources to suggest? Don't hold back— hit reply and help us get better!
Thank you!