Although facing major worldwide issues, Vietnam has made impressive economic advancements recently, according to Shantanu Chakraborty, the Country Director of the Asian Development Bank (ADB) for Vietnam.
During an interview with the Vietnam News Agency (VNA), he emphasized various major factors contributing to growth, starting with effective economic governance that enhanced stability during the COVID-19 crisis and worldwide political instability.
He stated that the government took firm actions with adaptable approaches and prompt financial and monetary strategies to address supply chain interruptions and increased global uncertainty.
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Laborers working in a textile plant in Ho Chi Minh City during August 2025. Image courtesy of VnExpress/Quynh Tran |
Strong commercial activity has coincided with vigorous manufacturing output. Vietnam has progressively joined global and regional supply chains. During the first seven months of 2025, exports amounted to $262.44 billion, reflecting an increase of 14.8% compared to the same period last year, whereas imports increased by 17.9%, reaching $252.26 billion, resulting in a trade deficit of $10.18 billion. Meanwhile, the industrial production index expanded by 8.6%.
Another essential component of investment, including both international and government-related investments, continues to be vital. Significant flows of foreign direct investment (FDI) have been key in driving economic expansion. From January through July, actual FDI increased by 8.4% compared to the previous year, reaching $13.6 billion, whereas committed funds reached $24.1 billion, reflecting an increase of 27.3% over the same period last year. Efficient allocation of public sector funding has similarly supported growth, as Vietnam’s public debt—approximately between 36-37% of GDP—provides considerable room for large-scale infrastructure developments.
Household spending has stayed fairly steady amid ongoing worldwide challenges, due to financial support initiatives like a 2% reduction in value-added tax (VAT) along with additional tax breaks and funding programs.
Meanwhile, the government has advanced extensive institutional changes, seen as essential for sustained development, and remains committed to maintaining an open stance regarding trade and investment, while effectively addressing outside challenges. Vietnam’s initial attempts to discuss mutual tariff agreements with the United States reflect this initiative-driven strategy.
These engineers play a key role in Vietnam’s remarkable development and its capacity to handle international difficulties, according to Chakraborty.
Outlook and challenge
However, the ADB Country Director warned that Vietnam will encounter increasing challenges in the near to mid-term. Rising tariffs, countermeasures, the prolonged Russia-Ukraine war, and unrest in the Middle East are anticipated to negatively impact economic outlooks.
As per the July 2025 Asia Development Outlook report,
Vietnam’s GDP
is expected to grow by 6.3% in 2025 and 6.0% in 2026, marginally lower than the April forecasts of 6.6% and 6.5%, respectively. During the first six months of 2025, investment, exports, and household spending continued to be the main contributors to economic growth; however, external elements such as foreign direct investment and export activities may not maintain their robust momentum. This situation presents Vietnam with a chance to enhance internal growth engines, especially through government-led investments.
In the face of increasing uncertainty, Chakraborty emphasized the importance of taking initiative and implementing long-term policies. Being a very open economy, Vietnam is susceptible to changes in international trade and investment patterns triggered by political conflicts and protective measures. Boosting competitiveness via better quality infrastructure, particularly in transportation and energy sectors, will be crucial to lower logistical expenses and enhance economic effectiveness in an environmentally friendly and sustainable manner.
A robust business ecosystem requires extensive structural reforms, growth in financial markets, skilled labor forces, and an increase in advanced services and technological innovations. Moreover, an improved business climate must motivate local companies to enhance their technical capabilities and managerial expertise, thereby increasing their contribution within global supply networks and fostering closer ties with multinational corporations.
Chakraborty also highlighted that climate change presents a significant challenge for Vietnam, endangering infrastructure, ways of life, and economic development. Adjusting to climate effects and capitalizing on prospects for sustainable growth should continue to be a key focus.
ADB’s cooperation priorities
In the future, aligning with continuous institutional changes, Chakraborty stated that the ADB will concentrate on various major sectors of collaboration with Vietnam.
1. Public investment and policy consultation within key industries. The ADB can assist with governmental expenditures on initiatives and program reforms, especially concerning infrastructure growth and major projects. Efficient public expenditure continues to be a focus, and the bank will keep offering technical aid to promote changes, as well as remain prepared to offer financial backing to further Vietnam’s developmental goals.
The second focus area is the advancement of the private sector. The ADB will keep backing initiatives that encourage private enterprise expansion, offering funding—either directly or via local financial organizations—for significant private sector endeavors. Particular emphasis will be placed on small and medium-sized companies and underprivileged groups including those led by women.
