Project

Localities playing part for overall growth goal

Published

3 weeks ago

February 21, 2025

The government will do all it can to reach its desired growth goal this year, with specific targets assigned to all localities and more assistance provided for businesses.

Localities playing part for overall growth goal

The government last week issued a resolution on growth goals for sectors and localities to hit a growth rate of 8 per cent upward this year.

Each locality in the country has been required to achieve a regional GDP of at least 8 per cent. Many must grow at a double-digit rate, such as Bac Giang (13.6 per cent), Haiphong (12.5 per cent), and Quang Ninh (12 per cent). Hanoi and Ho Chi Minh City, the two key economic drivers, are tasked to grow 8 and 8.5 per cent, respectively.

This unprecedented resolution also asked chairs of people’s committees of all localities to “expeditiously design growth scenarios of sectors on a monthly and quarterly basis, and scenarios on RGDP growth in service of the government’s economic management,” to be submitted to the Ministry of Planning and Investment (MPI) this month. In addition, localities are allowed to propose specific special mechanisms to the government to remove difficulties and utilise the advantages.

According to Resolution No.02/NQ-CP released last month on key tasks and solutions for improving the business environment in Vietnam, the government will continue focusing on cutting and simplifying administrative procedures and business regulations in a practical and effective manner.

The government will also continue amending, supplementing or abolishing unnecessary administrative procedures and regulations; while banning the enactment of new inappropriate business procedures, regulations, standards, and techniques that increase costs and cause difficulties and inconveniences for people and businesses.

It will also “continue to effectively implement the overall administrative reform programme, build an effective and dynamic administration, and create a safe, transparent, low-cost, and international-standard investment and business environment.”

In the last quarter of 2024, the General Statistics Office conducted a survey over more than 29,000 enterprises nationwide operating in manufacturing and processing; construction; and commerce and service. Over 77 per cent said their performance in Q4 was better than and kept stable as compared to Q3.

The manufacturing and processing industry was the most optimistic, with nearly 80 per cent saying their performance was better than or stable compared to Q3. This was followed by the commerce and service industry (77.6 per cent), and the construction industry (73.7 per cent).

Providing more support

At the government’s meeting with enterprises last week, Prime Minister Pham Minh Chinh stated, “One of the biggest tasks now is to continue supporting enterprises.”

Figures from the Ministry of Finance showed that in 2024, total financial assistance value from exemption, reduction, and extension of payment of assorted taxes, fees, and charges, as well as land rental for enterprises and the public was estimated at $8.22 billion – including policies implemented since 2023, with exemption and reduction worth about $4.1 billion and extension of $4.12 billion.

The government has ordered the State Bank of Vietnam to make greater efforts to achieve a credit growth rate of over 16 per cent this year, higher than the rate of about 15 per cent last year.

To ensure economic growth, sufficient electricity must be ensured. “The electricity growth rate must be 12.5-13 per cent this year,” Prime Minister Pham Minh Chinh stated at a government cabinet meeting early this month. “Public investment will help boost economic growth and pull in more investment.”

The National Assembly has assigned public investment for 2025 at $36 billion. This will be used for a series of key infrastructure projects including expressways, roads, and airports, including the $16 billion Long Thanh International Airport, and the North-South High-speed Railway, with construction set to commence in late 2027 and completion set for 2035.

The economy grew 7.09 per cent in 2024 when there were more than 157,200 enterprises newly established, registered at $64.45 billion, with over a million employees registered for employment, and nearly 76,200 businesses resuming operations, raising the total to over 233,400 – up 7.1 per cent on-year.

Positive projections

Last week, the government was reported that international organisations continue offering positive assessments on the Vietnamese economic growth outlook. The United Overseas Bank (UOB) and Asian Development Bank have projected Vietnam’s growth rate at 7 and 6.6 per cent, respectively, which are high compared to the world average of about 3.3 per cent, the MPI said.

According to Standard Chartered’s latest macroeconomic update released over a week ago, Vietnam’s economy is projected to grow by 6.7 per cent in 2025. Growth is expected to moderate from 7.5 per cent on-year in H1 to 6.1 per cent in H2, driven by increased business activity and sustained foreign investment.

“Vietnam’s GDP grew 7.1 per cent in 2024, well above the government’s target of 6.5 per cent, supported by accommodative monetary policy and strong retail sales,” Standard Chartered said. “However, recent data shows a moderation, particularly in the property sector, which continues to struggle despite early signs of recovery.”

Suan Teck Kin and Peter Chia, analysts at UOB, noted that in view of the strong momentum carried over from 2024 and while considering risks and potential downside from further trade friction from the new US administration, the bank has raised its forecast for Vietnam’s GDP growth in 2025.

“We expect positive momentum from domestic drivers such as production, consumer spending, and visitor arrivals to contribute to the activities, especially in the first half. However, uncertainty on trade outlook will be a major risk for Vietnam in the second half, with its rising dependence on exports, which have grown to a record high of more than $400 billion in 2024,” they wrote.

Andrea Coppola, lead country economist for Vietnam, Cambodia, and Laos World Bank

Vietnam has been making progress in improving institutions for many years, but additional reforms are needed to facilitate the country’s development and ensure high-income status by 2045.

The country’s decision-making system is consensus-based, and this has many positive features. It helps avoid overly hasty decisions, which can make for an unpredictable business environment. But it can also slow decision-making, even in cases where the need for change is clear.

To improve state capability, Vietnam may need to be more selective in how it intervenes in the economy. The Party general secretary’s request to abandon the “if you can’t manage, then ban” mindset is a critical innovation. Moving from a prohibition to facilitation mindset will help to reduce the number of unnecessary regulations and promote innovation, creativity, and efficiency. A flexible management mindset that fosters development will inspire agencies and civil servants to actively pursue new solutions.

Moreover, a more selective approach will ultimately mean doing less of many things, and the size of the state apparatus could shrink, which could also create efficiency savings while allowing the compensation in the public sector to catch up to that of the private sector. It is important to ensure that civil servants and public servants are compensated well to attract and retain the best talent and to motivate them.

Our panellists expect GDP growth to gradually lose momentum from current levels in the coming quarters: The fading effect of front-loading sales ahead of US tariff hikes and a high base of comparison will weigh on the result later in 2025.

Accordingly, full-year economic growth is seen decelerating from 2024, hovering around the lower band of the government’s 6.5-7 per cent target range. Growth in public spending, fixed investment and exports will soften, while stronger private consumption growth will provide tailwinds.

Extreme weather events and weaker-than-expected Chinese growth are downside risks. FocusEconomics panellists see GDP expanding 6.5 per cent in 2025, and 6.3 per cent in 2026.

We see industrial production expanding 7.8 per cent in 2025, down by 0.6 percentage points from one month ago, and expanding 7.3 per cent in 2026.Source: FocusEconomics

Related Topics:businesses growth goal localities Vietnam

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Real estate capital heading into suburban areas

Published

9 hours ago

March 12, 2025

Industrialzone.net

The shortage of affordable apartments in Ho Chi Minh City has led buyers with tight budgets to seek properties in neighbouring markets.

The real estate market in Ho Chi Minh City is facing a scarcity of land, while the cost of project development is continuing to rise. This has forced investors to carefully consider which product segments to focus on to ensure profits.

Real estate capital heading into suburban areas

Photo: baodautu.vn

Investors with land in strategic locations close to the city centre are prioritising the development of mid-range and high-end products to optimise financial outcomes.

As a result, buyers seeking affordable options are being forced to look elsewhere.

“The shortage of affordable apartments in Ho Chi Minh City has led buyers with limited finances to seek items in neighbourhoods like Binh Duong, Dong Nai, and Long An. In these areas, apartment prices hover at around $1,200-$1,600 per square metre, creating strong demand,” said Giang Huynh, head of research and S22M at Savills Ho Chi Minh City.

From another perspective, the average rental yield for apartments in Binh Duong is currently 4.7 per cent, well above the 3.7 per cent yield in Hanoi and 3.6 per cent in Ho Chi Minh City.

Dinh Minh Tuan, southern regional director of real estate trading platform Batdongsan.com.vn, shared that the high rental yield in Binh Duong is largely due to reasonably priced luxury apartments, with high rental prices and stable occupancy rates.

On average, a luxury apartment in Binh Duong can be rented for $400-$480 per month for a one-bedroom unit, and from $600-$800 for a two- to three-bedroom unit.

Meanwhile, in Ho Chi Minh City or Hanoi, apartments in the $1,800-$2,000 per square metre range can only be rented for around $280-$480 per month, depending on the number of bedrooms, not to mention the increasingly stiff competition in enticing tenants.

In response to the strong capital shift, real estate firms in Ho Chi Minh City’s suburban areas are accelerating legal procedures to launch new projects.

This trend reflects the investors’ agility and creates attractive opportunities for both homebuyers and investors in 2025.

Accordingly, Kim Oanh Group plans to launch a 27-hectare urban area in New Binh Duong City in the first quarter of 2025.

This will be the first project the company has collaborated on with Surbana Jurong, a partner from Singapore, under EDGE green standards.

The project features 1,656 townhouses and terraced houses, and 1,666 social apartments, priced from $28,000 per unit.

Major developer Phat Dat Real Estate Development Corporation plans to launch two major projects, Thuan An 1 and 2 in Binh Duong province, covering a total area of 4.46 ha.

The 1.8ha Thuan An 1 will provide 2,604 apartments and shophouses, while the 2.66ha Thuan An 2 will have 3,270 apartments and 16 townhouses. These projects are located on key roads.

Simultaneously, southern developer An Gia Group plans the launch of 3,000 apartments at The Gio Riverside and 76 shophouses in Di An city.

The three-hectare project, located on the provincial route DT16, offers nicely designed apartments with one to two bedrooms.

Regarding opportunities for homeownership, Phan Cong Chanh, an expert in real estate investment, noted that owning a home requires solid knowledge and time to raise financial resources.

For young people, buying a home immediately is a challenge due to limited finances.

Buyers can explore financial support packages and use leverage to shorten the time needed to purchase real estate. This needs to be accompanied by a reasonable plan to ensure long-term affordability.

“Overall, owning a home is not just a purchasing decision; it also requires a smart financial strategy. Whether choosing to buy immediately, rent, or invest in real estate in any segment, individuals must consider their financial conditions and personal plans carefully,” said Chanh.

Project

VinFast looks to long term with operational roadmap

Published

11 hours ago

March 12, 2025

Industrialzone.net

Carmaker VinFast aims to become a powerhouse in the electric vehicle market as it grapples with tougher competition abroad.

VinFast looks to long term with operational roadmap

The company wants to double EV sales when compared to last year’s figure

Potential investment from JTA Investment through an MoU between Vingroup and Qatar Investment Fund, which was unveiled last week, aligns perfectly with VinFast’s ambitious vision of scaling up production and sales in a competitive international market, the company said.

JTA Investment is exploring a potential equity investment of at least $1 billion in VinFast, the Nasdaq-listed EV manufacturer, as well as a strategic partnership aimed at supporting the company’s global expansion and technological development.

“This collaboration will unlock significant opportunities for Vingroup and its subsidiaries to drive technological, infrastructural, and sustainable economic advancement in Vietnam, while establishing a foundation for international expansion,” said Le Thi Thu Thuy, vice chairwoman of Vingroup.

Global electric vehicle (EV) competition is expected to get tougher as the demand for EVs is projected to increase further this year, but the outlook is being hindered by uncertainty surrounding tariffs and policy changes.

In 2025, S&P Global Mobility projects that 15.1 million battery EVs will be sold worldwide, a 30 per cent increase on last year. It is anticipated that 16.7 per cent of the light vehicle market will be made up of battery-based EVs.

S&P also reported that major unknowns await Chinese manufacturers BYD and Tesla in 2025 due to assumed changes to the US Inflation Reduction Act.

Last year, VinFast stated that it was delaying the opening of its North Carolina factory until 2028, which will allow the company to optimise its capital allocation and manage short-term spending more effectively, focusing more resources on supporting near-term growth targets and strengthening existing operations.

The company is expanding its strategy in India, Indonesia, and the Philippines, where EV infrastructure is developing rapidly but competition from domestic brands is limited. Experts said that in order to sustain long-term growth, it needs to compete with Chinese manufacturers and prove its competitiveness beyond its home market.

VinFast is scheduled to open factories in Subang, West Java and in the southern Indian state of Tamil Nadu this year. The plan to expand into India aims to seize growth opportunities in the world’s most populous nation and rapidly expanding EV market.

On February 28, VinFast and Motech Automotive Service Centres, through its franchisor and operator in the Philippines, signed an MoU on expanding the service network for VinFast’s EVs in the market. The agreement aims to meet the increasing demand for EVs among Filipino consumers, while affirming VinFast’s long-term commitment and determination to utilise green transformation across the region.

VinFast and Motech will collaborate to accredit over 60 Motech service workshops as approved VinFast service centres. In the Philippines, these service centres will have the authority to handle VinFast EV maintenance, warranties, and repairs. This year, VinFast intends to open over 100 similar service workshops throughout the Philippines.

In 2025, the company has set the ambitious target of doubling sales to around 200,000 EV globally after announcing impressive results in 2024, with 97,300 EVs sold globally, of which about 87,000 vehicles came from the domestic market.

Project

M&As in crucial sectors poised for rapid expansion

Published

13 hours ago

March 12, 2025

Industrialzone.net

Following the downturn, Vietnam’s merger and acquisition landscape is set to gain momentum in 2025, driven by spearhead industries from technology to manufacturing. Julien Curtet, partner of Index Partners, shared with VIR’s Thanh Van his insights into the overview and the prospect of the market.

How do you see Vietnam’s merger and acquisition (M&A) market affected by global market volatility?

M&As in crucial sectors poised for rapid expansion

Julien Curtet, partner of Index Partners

In 2024, global M&A activity rebounded, reaching approximately $3.5 trillion (a 15 per cent increase from 2023) with around 7,500 deals above $30 million. Corporate acquisitions rose by 12 per cent, and financial investor activity surged by 29 per cent, driven by private equity amid easing interest rates. Key sectors included technology, energy, financial services, and telecom.

Vietnam mirrored global trends with notable M&A activity in technology, energy, and industrial sectors, supported by a resilient macro and rising foreign investment.

In 2024, Vietnam’s M&A market experienced a downturn in transaction value, influenced by global economic uncertainties stemming from geopolitical tensions and currency fluctuations. However, deal volume reached around 160 transactions in the second half of 2024, marking a 25 per cent rise from the first half of 2024 and a 32 per cent jump from the second half of 2023, signalling a strong recovery trend and positive momentum for future growth. Some key deals in the second half of 2024 were Masan’s acquisition of an additional 7.1 per cent stake of VinCommerce from SK Group for $200 million, KIDO’s acquisition of Hung Vuong, Nvidia’s acquisition of VinBrain, and SK Group’s $300 million acquisition of Iscvina Manufacturing.

Mid-cap deals up to $25 million dominated Vietnam’s M&A market, accounting for just over half of total deal volume despite a 28 per cent drop in total transaction value. Mid-size transactions in the second half of the year included ADA’s acquisition of Customore and Elan’s $8.89 million acquisition of TMC Vietnam.

Could you shed light on some key drivers for the Vietnamese market in 2025 and beyond?

In 2025, it is set for strong growth, driven by key sectors such as infrastructure, technology, consumer, and manufacturing. Infrastructure will see a surge in investment, particularly in transportation and logistics, supported by government initiatives.

The technology sector is poised for rapid expansion, fuelled by favourable policies and accelerating digital transformation. Consumer spending is expected to rebound from a low base, signalling a recovery in the consumer sector.

Meanwhile, the manufacturing sector, which contributed over one-quarter of GDP in 2024, is projected to grow by 10 per cent in output, supported by new industrial zones and increased foreign investment.

The market is set to accelerate in the second half of 2025, fuelled by stable global interest rates and rising investor confidence.

Vietnam’s strong economic momentum, pro-investment policies, and booming sectors like technology, manufacturing, infrastructure, and recovery of consumer will drive deal activity, cementing its status as a key M&A hub in Southeast Asia.

How do foreign dealmakers approach strategies amidst global economic uncertainty, especially tariffs and new US policy?

Foreign dealmakers are reshaping their M&A strategies. Despite the challenges, Vietnam remains a key destination for cross-border investment, driven by its rapidly expanding technology, consumer, and manufacturing sectors.

Vietnam is rapidly advancing its technology sector, emerging as a significant player in the global digital landscape. Its commitment to technological innovation is evident through key partnerships, such as the collaboration with Nvidia to establish AI research and data centres in the country.

To further entice high-tech investments, the government offers substantial incentives, including up to four years of tax exemptions and a 50 per cent tax reduction for the subsequent nine years, as well as financial support from national sci-tech development funds.

Additionally, Vietnam’s consumer market is expected to recover in 2025, fuelled by a rising population, and increasing disposable incomes, boosting demand for goods and services. With consumer confidence rebounding and spending accelerating across sectors, Vietnam’s consumer market is regaining momentum as a vital driver of economic growth.

Vietnam is emerging as a manufacturing and logistics hub, attracting foreign investments due to its competitive labour costs (20–50 per cent lower than regional peers) and a 9.8 per cent increase in manufacturing output in 2024. An “anything but China” strategy is driving multinationals to shift production to Vietnam.

The country is also benefiting from major infrastructure projects, including the Long Thanh International Airport and deep-sea ports in Haiphong, are strengthening its logistics position, while expanding industrial areas and cross-border e-commerce fuel growth in both sectors.