Vietnam’s economy grows 7.5% in first half of 2025

HANOI - Vietnam’s economy expanded by 7.5% in the first half of 2025, marking its highest growth rate in over a decade, according to a quarterly update from Vietnam Enterprise Investments Limited (VEIL), a FTSE 250 constituent.

The growth was supported by strong domestic demand, increased government spending, and exports rising 14.4% year-on-year. Foreign direct investment registered $21.5 billion in the period, reaching the highest level since 2009, with actual disbursements of $11.7 billion, up 8.1% from the previous year.

The country’s ongoing reform program has made significant progress, with the restructuring of government ministries from 19 to 14 and provincial mergers from 63 to 34 now complete. These administrative changes are reportedly accelerating infrastructure approvals and investments, though some local-level integration challenges remain.

Public investment has increased to approximately $36 billion for 2025, up from $26 billion in 2024. Major infrastructure projects, including the North-South high-speed railway and highway expansions, are progressing ahead of historical timelines.

Capital market reforms have also shown results, with the Vietnam Index reaching an all-time high on July 28. Daily trading volumes now regularly exceed $1.5 billion, with July’s turnover increasing nearly 90% year-on-year.

Despite the positive developments, the country faces potential risks, including uncertainty around transshipment definitions that could impact manufacturing and exports. Weaker-than-expected global growth in key markets like the US, China, and the EU could pressure trade volumes and investment inflows.

The Vietnam Index rose 6.9% in the first half of 2025, while VEIL’s net asset value increased by 0.9% during the same period. The fund’s underperformance was attributed to $1.6 billion in foreign investor outflows affecting large-cap stocks central to VEIL’s strategy.

This information is based on a press release statement from Vietnam Enterprise Investments Limited.

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