Tiếng ViệtMr. Nguyen Ba Hung – Chief Economist of the Asian Development Bank (ADB) in Vietnam affirmed that Vietnam’s growth prospects in 2025 are positive and have the potential to achieve high growth. But if nothing is done, it will not be achieved, and it will require a lot of effort.
Reporter: In the regular meeting on February 5, the Government set a growth target of 8% for 2025. What do you think about this target?
Mr. Nguyen Ba Hung:This target shows that the Government is quite optimistic about Vietnam’s growth in 2025. Considering the positive growth momentum in 2024, the above target is feasible, however, whether this target is achieved or not depends on many factors. Including international market factors that are beyond our control.
Reporter: Can you analyze more clearly the advantages and disadvantages for Vietnam’s economic prospects in 2025?
Mr. Nguyen Ba Hung: The first advantage is the positive growth momentum in 2024. Besides, there are many things we can do better to promote growth. For example, public investment, better disbursement or even increasing the scale of public investment will bring great growth opportunities in 2025.
Another great advantage is the determination of the Party and State leaders as well as agencies from the central to local levels, in the spirit of facing the truth, identifying bottlenecks, specific solutions, only discussing action and not retreating. The effectiveness of this will take time to verify, but for now, this is very positive and in the right direction.
In addition, I think that other macroeconomic stability will still be relatively favorable. Public debt is positive, at a very safe threshold. Vietnam’s public debt level is low (in 2024 it will be about 36% of GDP), so if necessary, it is completely possible to borrow more to invest in infrastructure. Public debt can increase to 40 – 50% of GDP, which is still a safe level, but it is not necessary to reduce public debt anymore.
However, besides the advantages, Vietnam’s economy in 2025 also faces many difficulties. Of which, the most difficult and unpredictable difficulty at present is trade. In the short term, trade may still maintain good growth, because exports to the US may increase dramatically when Americans hoard goods and buy in advance to avoid price increases due to the Trump administration’s tariff policy. If Vietnamese goods are subject to tariffs, this will be a difficulty for Vietnam’s exports. An accompanying risk of this tariff policy is FDI. When trade is bad, FDI will also be bad, because FDI into Vietnam in recent times has mainly been export FDI, and if exports are bad, FDI attraction will also be bad. Vietnam did very well in the two export and FDI drivers last year, but the outlook for this year will be more difficult.
Regarding domestic demand, in 2024 there will be good growth but it has not yet reached the expected growth rate, and further stimulus is needed. Domestic enterprises have been facing difficulties in recent years, so it is mainly necessary to stimulate them through public investment and fiscal policy.
Vietnam’s growth prospects are positive and have the potential to achieve high growth. But if you do nothing, you will not achieve it, and to achieve it, you will need a lot of effort. There are many measures, but the most important of them is effective implementation. We need to make efforts to do better than last year to have a chance to achieve better results.
Reporter: As you just mentioned the fiscal policy to support businesses, in your opinion, what should be noted in the fiscal policy in 2025?
Mr. Nguyen Ba Hung:I think we should continue to maintain an open and flexible fiscal policy. In the current context of Vietnam, we still have to use fiscal measures to stimulate domestic demand because domestic demand is still weak. The continued reduction of 2% of value added tax until the end of June 2025 is very welcome. If in the coming time, depending on the actual situation, it is necessary to continue to extend this policy to stimulate demand, the Government will consider continuing.
The most important thing is that public investment is the driving force and support for growth when the spillover effect of public investment is very large. Therefore, it is necessary to strongly promote public investment disbursement right from the first months of the year, to achieve better disbursement results.
In addition, it is necessary to implement support policies well, for example, the support package for streamlining the apparatus. It is necessary to implement well to support those who are in the category of career change, but also to increase spending sources, contributing to partly to stimulate demand. Next are social programs to support workers, human resource training or social housing credit support programs… The policies are all very positive, in the right direction, the important thing is that the implementation needs to be promoted more effectively.
In addition, monetary policy also needs to be closely and flexibly coordinated with fiscal policy. Basically, the policy interest rate is also at a low level, relatively close to inflation, so there is not much room for reduction.
