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Vietnam’s government has set an ambitious target of achieving at least 10% annual economic growth over the next five years, despite ongoing trade tensions and global uncertainties that threaten to impact exports and investment flows.
Prime Minister Pham Minh Chinh stated at the National Assembly in Hanoi on Monday that the country will “continue to prioritize stimulating growth while maintaining macroeconomic stability, controlling inflation, balancing major economic factors, and keeping public debt and the budget deficit within sustainable limits.”
Chinh indicated that Vietnam’s economy is expected to grow by over 8% this year. For 2025, the growth forecast is between 8.3% and 8.5%. The economy experienced its fastest expansion in three years last quarter, driven by factories accelerating exports to the United States in anticipation of tariffs that took effect in early August.
However, achieving the bold 10% target will be challenging, as growth drivers such as exports, consumption, and investment have yet to demonstrate strong momentum, according to Phan Van Mai, head of the parliament’s economic committee. He cautioned that the global environment remains volatile, complex, and unpredictable amid escalating geopolitical competition and rising trade protectionism.
Vietnam is actively seeking to diversify its export destinations as it negotiates a trade agreement with the US. While tariffs initially threatened at 46% have been reduced to 20%, the US still imposed a 40% tariff on goods transshipped through Vietnam, adding further uncertainty for businesses until the specifics are clarified.
The country, which last year boasted the world’s third-largest trade surplus with the US, is also working to establish new trade partnerships and aims to negotiate free trade agreements with regions including the Middle East, Latin America, Africa, and Pakistan.
To boost economic development, the government plans to eliminate bottlenecks hindering key projects, particularly in renewable energy and industrial sectors. Currently, around 3,000 projects are under review, and authorities have been urged to expedite the approval process.
Vietnam will also focus on attracting foreign investment in projects that facilitate the transfer of advanced technology, with plans to start construction of a semiconductor plant next year—though details about the plant remain unspecified.
Despite ongoing tariff uncertainties, Vietnam continues to be an attractive alternative manufacturing and assembly base to China. Foreign direct investment disbursed in the first nine months of 2025 reached $18.8 billion, an 8.5% increase from the previous year.
However, consultant Mai warned that over-reliance on foreign investment could threaten Vietnam’s long-term competitiveness. He emphasized the importance of developing local champions to increase the domestic localization rate, which currently stands at around 36.6%.