Vietnam stands at the start of 2025, poised between challenges and opportunities as it seeks strong economic growth.
Despite global challenges, Vietnam’s economy showed remarkable resilience throughout 2024. With the Lunar New Year celebrations concluding, the nation reflects on past achievements and navigates its aspirations for the year. According to Prime Minister Pham Minh Chinh, Vietnam aims for at least 8% GDP growth this year, targeting continued double-digit growth from 2026 onward.
The rise of both exports and foreign direct investment (FDI) signifies confidence among entrepreneurs. FDI reached a record $25.35 billion as Vietnam continues to attract global investors. Leading the charge, Nguyen Xuan Phu, chairman of Sunhouse Group, anticipates growth from manufacturing and technology-based industries, as traditional sectors grapple with unpredictability.
The agricultural sector, particularly, faces difficulties as new regulations imposed by major export destinations, particularly China, create barriers. Traders report significant price drops; for example, off-season durian saw prices plummet from VND230,000 ($9.17) per kilogram to around VND90,000. Thanh, a trader from the Mekong Delta, remarked, "This year has seen the most significant drop in off-season durian prices since we started exporting." This situation has led to challenges not only by stringent inspections but also logistical disruptions and increased transportation costs.
The impact of strict pesticide residue regulations, particularly from the U.S. and EU, also negatively affected exports of fruits and vegetables. With January’s export revenues for this sector falling 11.3% year-on-year to $417 million, stakeholders worry about long-term sustainability.
Despite these challenges, optimism persists. Increased demand for seafood products presents potential growth avenues. A director of seafood processing stated, "There’s recovering demand for seafood imports…emerging markets like Africa and the Middle East show considerable potential." The industry aims for revenues of $11 billion by 2025, buoyed by higher tariffs on competitors from China.
Simultaneously, the coffee sector is also expected to flourish, as global demand rises amid production shortages, with revenue projections reaching $6 billion. Nguyen Nam Hai, chairman of the Vietnam Coffee and Cocoa Association, emphasized this momentum strengthens Vietnam’s position globally.
Technology remains central to Vietnam’s growth strategy. Emeritus Professor Carl Thayer underlines the need for Vietnam to modernize its production mechanisms to seize opportunities from the Fourth Industrial Revolution. Thayer noted, "Vietnam needs to continue the corruption combat but something else must be done." His call for streamlined government processes aims to facilitate innovation, digitalization, and technological advancements.
Business leaders are also emphasizing the need for reforms within bureaucratic structures to attract foreign investment and upgrade workforce skills. Nguyen Van Khoa, CEO of FPT Corp., remarked, "Economic diplomacy must focus on leveraging Vietnam's strengths." This sentiment is echoed across various sectors, as companies look to create local value chains and invest significantly to support economic growth.
There’s also hope for the tourism sector to bounce back, with expectations of strong recovery, albeit at slower rates than pre-pandemic years. Given the heavy reliance on Chinese tourist inflows, broader strategies are needed to diversify markets.
2025 promises to be transformative for Vietnam as it aspires to become an upper-middle-income developing country by 2030. Major institutions and enterprises areworking hand-in-hand to develop high-quality human resources necessary for the technology-dependent economy.
Determined efforts by the government and private sector can reshape the economic outlook substantially, with analysts optimistic about overcoming the current hindrances, reflective of Vietnam's potential to progress dynamically before mid-century.