Is Vietnam’s 8% growth target too ambitious ?

On Feb. 19 the National Assembly passed a resolution targeting at least 8% growth for the year as part of efforts to accomplish Vietnam’s economic and social development push.

The previous day, in an online meeting, an Australian analyst asked me bluntly when I mentioned Vietnam’s 8% growth target: « Isn’t that too ambitious given the current economic conditions worldwide and in Vietnam? »

This was not the first time I had heard that question. In the first two months of 2025 I was asked three times whether the 8% goal was too ambitious or how Vietnam planned to achieve it. Many Vietnamese experts shared the same concern.

Prime Minister Pham Minh Chinh acknowledged the challenge: « With such an ambitious target, failure is not an option. We must take decisive action to achieve it. »

According to the Vietnam government portal, this target is part of a long-term plan to break out of the middle-income trap and strengthen the economy. To reach that goal, Vietnam must sustain high, steady growth through 2045, and the 8% target marks the first major step.

Achieving this, however, requires tackling persistent obstacles that have hindered stronger growth in the past.

The biggest issue is funding—either a lack of it or an inability to allocate it effectively.

At a stock market development conference on Feb. 21 Minister of Finance Nguyen Van Thang estimated Vietnam would need more than VND4 quadrillion (US$150 billion) to meet its growth ambitions by year-end.

This is a massive sum considering Vietnam’s annual GDP is just over $400 billion. The key questions remain: Where will the money come from? How will the economy absorb it? And what impact will it have on inflation?

More importantly, how will this funding translate into actual economic growth? If too much goes into real estate or consumer spending, GDP may rise temporarily, but inflation could surge, overheating the economy before stagnation sets in.

Without productivity gains, Vietnamese businesses will continue to lose ground to foreign competitors.

Over the past decade Vietnamese private enterprises have struggled to move up the global supply chain, making little progress in capturing higher-value production.

At the end of 2024 I saw a designer shirt priced at over £1,000 ($1,270) in a foreign airport boutique. The label read « Made in Vietnam, » which made me proud, but it only reinforced Vietnam’s position as a low-cost manufacturer rather than a high-value producer.

A friend in the industry estimated that Vietnam’s earnings in such a deal would be just a few dozen pounds while foreign companies earned far more by controlling design, marketing, retail, and endorsements.

« They own the supply chain, the brand and the network, » my friend said.

On the plane, I kept thinking about Vietnam’s economic goals.

Achieving 8% growth and avoiding the middle-income trap is not just about making more « Made in Vietnam » products; Vietnamese businesses need to design and create their own products and brands.

The country’s traditional growth model relied too much on cheap manufacturing, while foreign companies captured most of the profits.

Vietnam’s exports had surpassed $385 billion for 2024 by mid-December, up 13.9% from the previous year, but foreign companies accounted for 71% of that.

Many domestic firms struggle, and some experts argue they either lack the capability or the motivation to scale up.

What is holding them back? The reasons are many, but two major ones stand out: excessive regulation and an unpredictable legal environment.

General Secretary To Lam has called these problems « institutional barriers. »

During my visit to Vietnam in October 2024, I saw this issue everywhere—from green energy projects to AI adoption in schools.

Businesses, NGOs and banks wanted to embrace greener practices but had to wait years for clear classification criteria. Schools wanted to integrate AI into their teachings but faced endless meetings with no clear guidance on what was allowed.

These challenges highlight a bigger issue: Vietnam does not need an entirely new growth model; it just needs to remove the roadblocks in its current one.

Entrepreneurs and startups should be able to test ideas, fail and try again instead of getting stuck in bureaucratic delays.

The government must simplify regulations so that local businesses, researchers and industry experts can work with top global firms. Only then can Vietnam strengthen its position in global supply chains.

Collaborating on high-value projects with international firms will help Vietnamese businesses gain expertise, prove their capabilities, and secure major contracts.

To make this happen, Vietnam must finally implement its long-discussed single-window or minimal-window regulatory system.

Bureaucratic procedures must be streamlined, and businesses need a straightforward process for securing approvals, permits and licenses. Government agencies must provide clear, decisive responses so that companies are not left uncertain about compliance.

While my focus is on the private sector, the same principle applies to another key driver of growth: infrastructure investment and public spending.

« How can local governments disburse funds? » has been a question asked repeatedly for years.

So far the discussion has only addressed the symptoms. The real solution is to give local governments more control over planning, capital allocation and fundraising, and ensuring accountability for results.

Without a more streamlined bureaucratic system, Vietnam has little chance of achieving its 8% growth target.

The government’s efforts to simplify administration are a step in the right direction. But making bureaucracy more efficient is not enough—the system must actively support businesses and citizens.

When entrepreneurs face fewer restrictions, they can expand deeper into supply chains and partner with more global industry leaders.

Removing regulatory barriers will not just attract foreign investment; it will enable Vietnam to compete on the world stage with other major economies.

Cutting red tape is not a new idea. Vietnam has discussed it for years.

To achieve its ambitious growth target, the country must renew its push for real economic reform.

By Ho Quoc Tuan – VnExpress.net – March 3, 2025