Sustaining high growth must be balanced in stable manner

The Vietnamese economy grew at a high rate of 8.02 per cent in 2025. What is your analysis of the result as compared to the economic performance of regional neighbours?

Vanne Khut

Vietnam’s growth in 2025 exceeded expectations, outperforming its ASEAN+3 peers despite a challenging global environment. This strong out-turn was driven by resilient exports, robust domestic demand, and supportive macroeconomic policies.

Notably, exports benefited from strong AI‑related demand and temporary US tariff exclusions for selected semiconductor and chip‑related products. Meanwhile, government measures, including VAT cuts, accelerated public investment, and an accommodative monetary policy, also played a key role in sustaining domestic demand.

The government has set a growth target of 10 per cent or more in 2026. Does AMRO think that this goal will be feasible, and why?

The government’s target is highly ambitious and entails considerable risks, particularly against a challenging external environment marked by elevated global trade uncertainty.

Efforts to sustain high growth must be balanced with the need to safeguard macroeconomic and financial stability. While continued fiscal support and an accommodative monetary stance can help bolster growth, it would be prudent for policymakers to remain mindful of shifting global financial conditions to avoid exacerbating domestic vulnerabilities.

Vietnam will use public investment as one of the key drivers for hitting higher growth in 2026. Is this the best area to focus on?

Public infrastructure investment is a key policy tool to bolster near-term growth while strengthening the economy’s long-term growth potential, in line with the government’s broader development objectives.

Vietnam’s approach is broadly consistent with practices across the ASEAN region, where public investment is widely used to support demand during periods of uncertainty while laying the foundations for productivity gains and private-sector crowd-in over the medium term.

The growth impact of public investment will depend critically on implementation. Regional experience shows that timely disbursement and strong execution capacity are decisive in translating public investment into higher growth outcomes.

Credit growth in Vietnam in 2025 reached 19 per cent. Can the same monetary stance be applied this year, and what should be done in terms of fiscal and monetary policies for Vietnam to keep the macro-economy on the right track?

The robust credit growth in 2025 has provided an impetus to economic growth. The State Bank of Vietnam has recently lowered credit growth target for 2026 by one percentage point, suggesting a more cautious policy stance aimed at balancing growth support with financial stability considerations.

When it comes to fiscal policy, it is necessary to enhance the effectiveness of public spending by ensuring timely disbursement of public investment and strengthening project selection, procurement, and implementation to maximise growth impact.

In addition, it is also necessary to maintain fiscal deficits and public debt on a prudent path to preserve policy space and to prepare for future shocks. Any fiscal support should be well targeted to vulnerable households and firms and gradually unwound as conditions normalise.

As for monetary policy, it is advised that the Vietnamese government continue modernising the monetary policy framework by deepening interbank and government bond markets to improve interest rate transmission.

It is also needed to maintain exchange rate flexibility and adequate foreign exchange reserves to cushion the economy against external shocks.

Regarding monetary and fiscal policy coordination, Vietnam should strengthen coordination between the Ministry of Finance and the central bank to ensure government bond issuance reflects prevailing market rates. This would help improve market signals, liquidity, and monetary policy transmission.