Amid a volatile global context of persistently high interest rates, lingering geopolitical tensions, rising trade protectionism, and weakened consumer demand in major economies, Vietnam maintained stability in its economy in the first ten months of 2025; a notable achievement and important platform for medium-term growth while also providing a foundation of confidence for the business community and investors.
Sound performance
Inflation was kept under 3.27 per cent in the period, the exchange rate was managed flexibly, and foreign exchange reserves continued to be strengthened as trade was in surplus to the tune of $19.56 billion. Monetary policy was proactively and flexibly implemented, helping stabilize financial markets and supporting business recovery.
Total State budget revenue reached VND2,145 trillion ($82.5 billion), exceeding the full-year estimate by 9.1 per cent and up 28.5 per cent against the same period last year. Public investment disbursement was estimated at 63.1 per cent of the plan, up 27.8 per cent year-on-year and the highest level in many years, creating a positive spillover effect on aggregate demand and employment.
The industrial sector, particularly export-oriented manufacturing, continued to be the main driver of growth. The Index of Industrial Production (IIP) is estimated to have risen by 9.2 per cent compared to the same period of 2024, when it rose 8.3 per cent year-on-year, with the manufacturing and processing sector increasing 10.5 per cent, or one percentage point higher than last year. Electronics, computers, optical equipment, and textiles all posted significant growth.
The Purchasing Managers’ Index (PMI) for October stood at 54.5 points, the highest since July 2024 and up sharply from September’s 50.4 points, reflecting strong improvements in the manufacturing and processing sector. Business confidence, meanwhile, hit a 16-month high.
Exports reached $391 billion in the first ten months, up 16.2 per cent year-on-year. Of note, the electronics, computers, and components group rose 47.9 per cent, while machinery, equipment, tools, and other parts grew 12.2 per cent. High-tech products and precision mechanical products saw strong growth, reflecting global supply chain shifts towards Vietnam. FDI enterprises accounted for 75.9 per cent of export turnover, maintaining their role as the “anchor” of the manufacturing and processing sector.
Domestic consumption saw a solid recovery in the period. Total retail sales of goods and consumer services increased 9.2 per cent, and excluding price factors was 7 per cent, or 2.2 percentage points higher than in the same period last year, indicating that consumer confidence is returning after a long period of restrained spending. The tourism market rebounded strongly, with nearly 17.2 million international visitors coming to Vietnam, up 21.5 per cent.
Both business and consumer confidence indicators improved. According to the latest survey, 40.8 per cent of businesses expect better production and business results in the fourth quarter of this year, up 7.2 percentage points from 33.6 per cent expecting likewise in the third quarter, supported by a favorable interest rate environment and rising domestic demand.
Uneven recovery
Behind encouraging growth indicators, however, the economic picture in the first ten months of the year still exhibited some darker tones, with recovery momentum lacking broad spillover across sectors. Credit growth was 15.09 per cent compared to the end of 2024 and 20.66 per cent year-on-year, but was mainly concentrated in trade, services, and real estate, while manufacturing and processing, support industries, and innovation faced a shortage of medium and long-term capital.
Domestic enterprises still have poor capital absorption capacity. Many small and medium-sized enterprises continued to struggle to access credit due to collateral requirements, borrowing costs, and the fact that market demand is still to fully recover. Though the number of newly-established enterprises increased 19.7 per cent, 105,400 businesses exited the market, revealing that the private sector still faces many difficulties and the business environment has yet to improve completely.
The real estate market, meanwhile, despite signs of warming up in some segments, still suffers from low liquidity, high inventories, and potential non-performing loans, posing risks to the financial system. Many unfinished projects remain stalled due to unresolved legal issues.
Export growth still relies heavily on FDI enterprises, while domestic private businesses are not yet strong enough to become a critical pillar of the economy.
The biggest highlight in Vietnam’s economy in the first ten months of 2025 was its ability to maintain stability amid uncertainty, preserving major macro-economic balances and keeping inflation under control. However, stability is only a condition; to achieve growth, as institutional breakthroughs and market confidence are essential. Therefore, the 2026-2030 period must be a time of decisive institutional reform, with a spirit of change for development.
From stability to reform
Vietnam’s economy demonstrated resilience in the first ten months amid a volatile environment, but significant challenges lie ahead. This is a time for the country to shift from cautious management to proactive creation, firmly adopting the principle of “Stability for resilience, Reform for growth”, daring to innovate, delegate, and trust the market. Only then can the economy move beyond passive stability towards dynamic, creative, and sustainable growth, in line with the vision of a self-reliant, deeply integrated, and prosperous Vietnam by mid-century.
While macro-economic stability is the foundation, sustainable growth requires new drivers to push the economy beyond its existing inertia. While recovery momentum is appearing, it remains fragile as many resources are still underutilized. This is a time for stronger, more substantive, and more open policy action to generate new impulses for businesses, markets, and citizens to grow together.
First, it is crucial to maintain macro-economic stability while fostering investment confidence. Monetary policy should keep interest rates at reasonable levels and manage the exchange rate flexibly, while sending clear policy signals to strengthen market expectations, especially for the private sector.
Second, economic institutional reform must continue, focusing on cutting business conditions, genuinely decentralizing to local authorities, and protecting property rights and business freedoms. This is essential for creating a competitive, transparent, and attractive investment environment.
Third, developing domestic capital markets is a priority. Reducing reliance on bank credit and expanding capital-raising channels through bonds, investment funds, and green financial instruments will be key. Vietnam should soon establish a legal framework for “sustainable finance” linked to green development and energy transition goals.
Fourth, promoting internal productivity and innovation-driven growth is equally important. The State should prioritize policies that encourage technology investment, support digital transformation, develop high-quality human resources, and enhance domestic value added in exports.
Fifth, a strategic triangle for development should be established, connecting the green economy, the digital economy, and the knowledge economy as three pillars creating a mutually-reinforcing growth engine. The green economy provides the foundation for sustainable growth, balancing development and environmental protection and aiming for net-zero emissions. The digital economy opens space for higher productivity, innovative business models, smart governance, and e-commerce, enabling Vietnamese enterprises to integrate more deeply into global value chains. And the knowledge economy acts as the “capstone” of the triangle, centering on human capital, creativity, and knowledge, where science, education, technology, and innovation converge.
When these three pillars are connected and synchronized, they create a framework for sustainable and self-reliant development for Vietnam, allowing adaptation to global transitions while creating long-term competitive advantages. The key is to design institutions, policies, and resources so that each pillar can maximize its role, forming a new identity for Vietnam’s economy in the new era.
(*) Dr. Nguyen Bich Lam is the former General Director of the General Statistics Office (now the National Statistics Office under the Ministry of Finance)
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