Assoc. Prof. Dr. Pham The Anh, Dean of the Faculty of Economics at National Economics University (NEU), affirmed that assigning growth targets to localities gives them goals to strive toward by removing barriers, supporting businesses, and improving the investment and business environments to generate high growth.

Finding New Drivers of Development

Regarding the Government’s assignment of double-digit growth targets to localities, Assoc. Prof. Dr. Pham The Anh, Dean of the Faculty of Economics at NEU, said these were intended more as goals to strive toward than administrative orders. This differs from Khoan 10 in agriculture 40 years ago (a mandatory target that had to be achieved — reporter’s note). Growth is not something localities or the Government can “hold firmly in their hands.” It depends on markets, the private sector, and global conditions.

Assoc. Prof. Dr. Pham The Anh

Assoc. Prof. The Anh said achieving the targets depends on many factors. First, it depends on local authorities implementing reforms that improve the business environment, make the investment environment more attractive, and meet the needs of local businesses and residents.

By assigning targets, the Government aims to encourage localities to work alongside the central authorities in supporting the business community, quantify which localities are performing well and which are not, and identify difficulties.

“Until now, we have always looked at aggregate national figures. Assigning specific targets now allows for better tracking and monitoring. From a national governance perspective, this is one approach, with the understanding that these are goals for localities to strive toward and a way to identify each locality’s potential and problems,” Mr. The Anh observed.

Given these factors, Assoc. Prof. The Anh said the growth targets assigned to localities are not rigid figures imposed through administrative orders.

According to Mr. The Anh, the Government bases its targets on each locality’s potential. Provinces assigned double-digit growth targets are generally those with large concentrations of industrial and export processing zones that attract foreign investment… or those with potential for tourism development, or where the Government is investing in infrastructure development in 2025 (such as the Ninh Thuan nuclear power plant)… In other words, these are localities capable of making breakthroughs by attracting foreign investment flows shifting away from China, such as Bac Ninh and Bac Giang…

It is estimated that if exports to the United States fall by 10% this year due to new U.S. government policies, GDP could decline by approximately 3%. Photo: Nguyen Bang

Identifying Risks to Develop Solutions

Assoc. Prof. Dr. Pham The Anh observed that the national growth target of 8%, and even the ambition to achieve double-digit growth, is quite high relative to the potential of the country and its localities.

Such high growth may come with risks. Currently, Vietnam’s economy depends on the external environment. One of Vietnam’s main growth drivers is exports, concentrated in major markets such as the United States, the EU, and Japan… However, unpredictability in the tariff policies of President Donald Trump’s administration points to certain risks. Global economic tensions are “heating up” as the United States imposes tariffs under its new policies.

In 2024, Vietnam exported more than USD 142 billion to the U.S. market, equivalent to 30% of GDP. Therefore, every move by President Donald Trump’s administration has a major impact on Vietnam’s economic development.

Assoc. Prof. Pham The Anh said that if exports to the United States fall by 10% this year because of new policies, GDP could decline by approximately 3%, and achieving the national target of 8% could face certain challenges.

“If exports are affected, FDI flows into Vietnam will also slow, affecting Vietnam’s growth,” Mr. The Anh said.

The expert said that if FDI inflows are constrained, the Government will have to concentrate resources on driving growth in the domestic sector. The Government will then need to rely more heavily on fiscal and monetary tools, alongside persistent efforts to improve the business environment to attract private sector investment.

Without confidence and peace of mind, businesses will not invest. Private capital will then flow not into production but into seeking profits from price differences in asset markets such as gold, real estate, or stocks…

Without attracting private capital into production, economic growth will be difficult. However, creating an environment in which domestic private businesses feel confident investing in production is a long-term undertaking that will take several years.

“High growth always involves constraints and trade-offs. What matters is achieving high growth while maintaining macroeconomic stability; it must be accompanied by low-to-moderate inflation and exchange rate stability, without allowing nonperforming loans to become a major problem or the budget deficit to become too high. This is a difficult problem and a major challenge,” Mr. The Anh said.

The expert also said the Government should bring domestic businesses into public investment projects and make commitments to give them confidence. At the same time, it must remove unnecessary licensing procedures. The Government is streamlining its apparatus and reducing staffing, but this must go hand in hand with streamlining procedures and processes and reducing unofficial costs. Merging ministries, agencies, and localities will only be meaningful if it also reduces the number of administrative units and administrative procedures.

On February 5, the Government issued Resolution 25 on growth targets for industries, sectors, and localities to ensure national growth of at least 8% in 2025 (hereinafter referred to as Resolution 25). The Government assigned double-digit GRDP growth targets to 18 of the 63 localities, with no locality assigned a growth target below 8%. The country’s two economic centers, Hanoi and Ho Chi Minh City, were assigned growth targets of 8% and 8.5%, respectively. Bac Giang received the highest GRDP growth target for 2025 at 13.6%, followed by Ninh Thuan at 13%.

Source: Tien Phong Newspaper

This is an automated translation. If you notice any errors, please contact the Department of Communications, National Economics University at phongtruyenthong@neu.edu.vn.