Unlocking dormant capital to accelerate private-led growth

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Vietnam is undergoing one of its most ambitious reform phases in recent history. Since the start of the year, a series of high-level policy initiatives led by the Politburo have begun to take effect. These include four key Resolutions (57, 59, 66, and 68) addressing innovation, regional development, institutional reform, and private sector expansion, respectively. Together, they form the foundation of a new strategic agenda focused on three priorities: promoting private enterprise, reducing inefficiencies, and accelerating public investment. It is not just the ambition of the reforms but also the pace of reform that stands out, which is more akin to corporate restructuring than government process.

To support these reforms, the government has issued Resolutions 198 and 139 to encourage greater private sector involvement in national infrastructure. Major Vietnamese conglomerates have already responded. THACO and Vingroup have proposed investment in the North–South high-speed railway, Hoa Phat Group has committed to supplying steel rails, and FPT is pledging support for workforce development and chip design. These responses mark a notable shift in sentiment as the private sector begins to re-engage with state-led initiatives after a prolonged period of hesitancy. The government has also revised its approach to economic violations, prioritising administrative penalties and restitution based on economic harm, with judicial proceedings reserved for more severe cases, which we believe will further improve sentiment and encourage the private sector to become increasingly active.

At the project level, a comprehensive review of stalled and underutilised investments has been completed. Proposals are to be submitted to the Politburo and National Assembly to resolve legal and procedural bottlenecks affecting more than 2,200 stalled projects. These projects represent approximately $235bn in registered capital and span around 347,000 hectares. This latent stock of incomplete investments, equivalent to nearly 50% of Vietnam’s GDP, has been a persistent drag on capital efficiency. It also helps explain the disconnect between strong credit growth and weaker money supply expansion, as significant volumes of lending have been absorbed by delayed or low-productivity projects. Ministries and agencies have been instructed to continue reviewing and amending relevant regulations, with legislative action expected in the October 2025 National Assembly session and implementation to follow in the coming months.

Until global conditions allow for further monetary easing, fiscal policy will be the main growth driver in 2025. Despite transitional challenges linked to administrative consolidation, public investment disbursement reached 24.1% of the annual target by the end of May, ahead of the 20.3% pace over the same period last year. The Prime Minister has instructed full disbursement of the approximately $32bn public investment budget by year-end. The government has also signalled its willingness to mobilise additional domestic and foreign capital for large-scale national infrastructure projects, even if doing so pushes debt levels closer to official thresholds.

These policies represent a decisive shift in economic strategy, beyond incremental reform and baseline growth. The government is transitioning to a new development model anchored by private sector expansion, backed by legislative overhaul, and reinforced by accelerated public investment. The aim is to achieve more sustainable and ambitious GDP growth well above the previous 5.5-6.5% average, more reflective of the country’s potential. If executed effectively, these reforms could unlock a sizeable pool of idle capital and channel it into productive use, but slow implementation or partial delivery could prolong inefficiencies and weaken credit allocation.