Speaking with a reporter, Prof. Dr. To Trung Thanh of National Economics University (NEU) said that unpredictable developments in the global economy also present an opportunity for Vietnam to harness internal drivers such as the private sector and domestic consumption to pursue high growth in 2025 and subsequent years.

How do you assess Vietnam’s economic growth prospects in the current context?

In 2024, although Vietnam’s economy recorded strong growth and returned to its pre-Covid growth trajectory of 2019, its growth model remained based on expanding inputs, with little improvement in growth quality. New growth drivers such as innovation and the digital economy still made limited contributions to growth.

In addition, the economy remains vulnerable to global economic instability, while problems related to environmental unsustainability persist.

Given these characteristics of the economy, Vietnam must be very cautious about macroeconomic instability if it wants to grow rapidly in the coming period. To achieve sustainable long-term growth and the goal of becoming a high-income country in 2045, economic institutional reform is crucial. It can be described as the driving force behind new growth drivers.

As you mentioned, institutional reform is an important driver of economic growth. Could you elaborate on this driver?

Although Vietnam has improved its economic institutions in line with a socialist-oriented market economy and created a very favorable environment for production and business activities, certain limitations remain. In particular, the institutional framework still does not fully respect market principles, and traditional intervention measures continue to be used. In my view, there is considerable scope for institutional reform in both the economy and the state administrative apparatus. Such reform will provide a foundation for economic growth in the next period.

My recommendation is to develop an economic legal and institutional framework that continues to ensure the state’s management role but, more importantly, supports private-sector development, abandoning the mindset of “ban what we cannot manage.”

Second, we need to strengthen policy implementation capacity.

Third, we need to reduce administrative controls and create a transparent, equitable environment for all sectors of the economy to develop.

One issue attracting considerable attention now is the United States’ imposition of tariffs on Vietnamese goods, and we are currently still negotiating. From an economist’s perspective, what would you recommend if we fail to secure a rate favorable to the economy?

The United States’ imposition of a 46% reciprocal tariff on Vietnamese goods (currently suspended for 90 days) could represent a very substantial shock if we do not achieve a favorable negotiating outcome, because it affects both exports and the foreign direct investment (FDI) sector. These have also been important resources for economic growth in recent years. Economic growth could therefore clearly be affected significantly, with implications not only for employment and incomes but also for macroeconomic instability, exchange rates, inflation, and domestic interest rates. Managing policy to ensure strong growth in the coming period will also become more difficult.

Unpredictable developments in the global economy also present an opportunity for Vietnam to harness internal drivers such as the private sector and domestic consumption

Thus, amid global instability and volatility, this is an opportunity for us to focus on the domestic economy. The private sector must be regarded as the most important economic sector for strengthening internal capacity and creating the flexibility needed to respond to global macroeconomic instability.

At the same time, we need to diversify export markets. Vietnam currently has many free trade agreements (FTAs), and this is an opportunity to take advantage of them. Concentrating on a single market clearly leaves the economy vulnerable when instability arises.

In addition, Vietnam needs to restructure its production chains and increase domestic production. We also need to focus on stimulating domestic consumption and turning it into an important driver of economic growth.

Current policies indicate that there is still room to improve domestic consumption by increasing public spending or selectively reducing taxes. This is very important for increasing private consumption, strengthening the economy’s internal drivers, and supporting growth in the coming period.

Thank you!

Link: https://thoibaonganhang.vn/gsts-to-trung-thanh-phat-huy-noi-luc-de-tang-truong-kinh-te-cao-trong-nam-2025-162680.html

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