VINACHEM

Massive public and private investments aim to drive GDP growth and strategic infrastructure upgrades.

Hundreds of projects have recently been launched nationwide, with a total investment of around 1.28 quadrillion VND (approximately $53.4 billion). This significant capital injection is expected to accelerate economic growth not only in 2025 but also in the years to follow.

Accelerated investment to fuel infrastructure and economic expansion

On August 19, 250 projects across the country were simultaneously inaugurated or commenced construction, totaling about $53.4 billion in investment. Of this, 129 projects are publicly funded, accounting for $19.9 billion or 37% of total investment. The remaining 121 projects, worth $33.5 billion (63%), are funded through other sources, including private and foreign direct investment (FDI).

Deputy Minister of Construction Le Anh Tuan stated that these 250 projects will contribute more than 18% of Vietnam’s gross domestic product (GDP) in 2025, and over 20% in subsequent years.

“Public investment projects are shaping strategic infrastructure that will lead and attract private sector participation,” said Tuan.

Among these projects are five major FDI initiatives with a combined investment of $2.2 billion. These reflect the government’s strong commitment to mobilizing resources across society for production, business, and strategic infrastructure development.

The Ministry of Finance estimates that in order to achieve the national growth target of 8.3% to 8.5%, total social investment must grow by 11% to 12% year-on-year. This means that in the second half of 2025 alone, the country needs to mobilize about 2.8 quadrillion VND ($116.8 billion) in investment capital.

The State Bank of Vietnam also projects that credit must grow by 16% this year to meet these growth targets, injecting around 2.5 quadrillion VND ($104.3 billion) into the economy. Recently, a credit package of 500 trillion VND ($20.9 billion) was introduced, sourced from 21 banks, to support science, technology, innovation, digital transformation, and infrastructure sectors such as transport, power, and digital infrastructure.

In practice, banks are already providing loans to strategic projects such as Long Thanh International Airport, Nhon Trach 3 and 4 power plants, and the Lao Cai - Vinh Yen transmission line, as well as BOT infrastructure and power grid projects. One bank recently joined the financing of a major 500kV transmission line.

Hoang Minh Ngoc, Deputy General Director of Agribank, stated: “Collateral is only one condition; we also lend based on trust and the client's relationship with the bank. For the 500 trillion VND credit package, businesses only need to meet qualification requirements to be eligible.”

Caution: inflation risks remain

To hit the 8.5% growth target while maintaining macroeconomic stability and controlling inflation, monetary policy plays a critical role.

The banking sector is being pushed to increase capital supply. However, this raises the challenge of ensuring funds are directed to priority sectors while preventing banks from aggressively competing for deposits amid rising credit demand.

Since early 2025, deposit interest rates have remained stable, and lending rates have dropped by 0.4 percentage points compared to late 2024. Inflation remains under control, but risks are increasing. Expanding money supply may heighten inflationary pressure, while exchange rates are also under strain due to both economic and psychological factors.

Economist Ngo Tri Long emphasized that capital injections are essential for stimulating economic growth, especially in infrastructure, which drives broad positive impacts across sectors.

However, Long warned that early inflation control success in the first half of the year was due to effective coordination of monetary, fiscal, trade, and price management policies. The road ahead remains uncertain, and to maintain annual CPI within the 4%–4.5% target range, policy execution must remain consistent, flexible, and responsive.

The State Bank of Vietnam should maintain stable base interest rates and target 16% credit growth, with capital focused on exports and key production sectors. Credit must avoid being spread too thinly, which could trigger price spikes.

Meanwhile, fiscal policy should provide controlled support - without major adjustments to taxes or fees - to avoid burdening end consumers. With only 36% of public investment disbursed by June 30, future disbursements should focus on enhancing infrastructure and internal capacity, boosting medium-term supply rather than triggering short-term demand spikes.