Vietnam’s Socio-Economic Performance in January 2025

Vietnam's economy demonstrated resilience and adaptability in January 2025 despite seasonal and global challenges. Key indicators highlight strong agricultural performance, robust foreign investment inflows, and a growing services sector. However, trade fluctuations, industrial slowdowns, and environmental concerns present significant areas that require policy interventions and strategic adjustments.

It is essential to recognize that all economic data in Vietnam originates solely from the General Statistics Office (GSO), which is a state-controlled agency. Although these figures consistently portray a positive outlook, their accuracy and methodology are frequently called into question. Nevertheless, due to the lack of independent data sources, there is no means to verify these statistics, rendering economic transparency a recurring subject of discussion.

Agriculture, Forestry, and Fisheries: Stability Amid Challenges

Agriculture

Vietnam's agricultural sector remains the backbone of the economy, with over 2.02 million hectares of winter-spring rice cultivated, reflecting 103.9% of last year’s level. The northern provinces experienced remarkable growth (141.4%), while the Mekong Delta—a key rice-producing region—expanded by 101.5%.

The shift from sweet potatoes and soybeans to higher-value crops like corn and vegetables reflects farmers’ adaptation to market demand and climate conditions. Meanwhile, livestock farming showed mixed results, with a 3.7% increase in pigs and a 1.7% rise in poultry, while cattle (-0.3%) and buffaloes (-4.4%) declined, likely due to changing dietary preferences and cost efficiency considerations.

Forestry

Forestry expansion continued with 8.2 thousand hectares of newly planted forests, a 2.6% year-on-year increase. However, deforestation remains a growing concern, with forest damage surging 90.6% due to illegal logging and forest fires. Sustainable forestry management remains critical to mitigating environmental degradation while supporting economic growth.

The surge in deforestation rates calls for enhanced enforcement of environmental laws and greater incentives for afforestation initiatives. The government’s push for sustainable timber production and conservation programs must be strengthened to align with global commitments to environmental protection.

Fisheries

Aquaculture continues to gain traction, with a 5.1% increase in farmed seafood production offsetting the 4.3% decline in wild-catch fisheries. This shift aligns with global sustainability trends and Vietnam’s growing reputation as a key seafood exporter.

The increasing reliance on aquaculture is a double-edged sword, as improper farming practices can lead to environmental degradation. Addressing water pollution and disease outbreaks in fish farms should be prioritized to ensure long-term sustainability in the fisheries sector.

Industrial Production: A Mixed Picture

Industrial output remained stable year-on-year (+0.6%) but saw a sharp 9.2% decline compared to December, reflecting seasonal slowdowns and external market uncertainties.

• Manufacturing grew 1.6%, indicating that domestic production remains resilient.
• Electricity production rose 0.4%, signaling stable demand.
• Water supply and waste management grew 9.2%, demonstrating Vietnam’s commitment to urban sustainability and infrastructure improvements.
• Mining declined by 10.4%, continuing its long-term contraction due to depleting resources and environmental regulations.

Although the manufacturing sector has remained relatively strong, global demand fluctuations and supply chain disruptions pose a risk to export-driven industries. Vietnam must diversify its manufacturing base and invest in technological advancements to maintain competitiveness.

Labor demand remained strong, with industrial employment increasing 4.5% year-on-year, supporting economic stability. However, labor productivity growth remains a challenge, requiring greater emphasis on skills development and automation adoption.

Business Registration: A Surge in Market Re-Entry

Vietnam’s business landscape saw a mixed trend in January:

• 10.7 thousand new businesses were registered, a 6.6% increase from December but a 30.3% decline year-on-year.
• 22.8 thousand businesses resumed operations, up 65.2% year-on-year, showing renewed confidence among entrepreneurs.
• Business closures increased by 8.1%, signaling tighter competition and financial constraints.

The higher rate of business re-entry is a positive signal that Vietnam’s entrepreneurial environment remains dynamic. However, the decline in new businesses suggests challenges in accessing capital and regulatory bottlenecks, which may discourage new entrants into the market.

Investment: Vietnam’s FDI Momentum Remains Strong

Vietnam continues to attract foreign investors, with FDI inflows reaching $4.33 billion (+48.6%) and implemented FDI totaling $1.51 billion (+2.0%).

Key drivers include:

• Strong global supply chain integration
• Government incentives for high-tech manufacturing
• A competitive workforce

Despite the strong FDI inflows, Vietnam must continue enhancing legal transparency, reducing bureaucratic hurdles, and improving infrastructure to remain attractive to foreign investors.

Vietnam’s outbound investment also surged (5.1 times higher than last year), reflecting domestic firms’ increasing global ambitions. This suggests that Vietnamese enterprises are becoming more confident in expanding internationally, signaling an important shift towards regional and global integration.

State Budget: Balanced Growth in Revenue and Expenditure

• Total revenue: VND 275.9 trillion (+3.5% YoY)
• Total expenditure: VND 134.4 trillion (+4.8% YoY)

While revenue outpaced inflation, the growing budget expenditure highlights the government’s focus on public infrastructure and social programs. However, concerns about inefficiencies in public spending and debt management remain, requiring fiscal discipline and greater transparency in state-funded projects.

Conclusion: Policy Adjustments for Sustainable Growth

Vietnam’s economy is resilient and adaptable, supported by strong investment, a vibrant services sector, and controlled inflation. However, industrial volatility, environmental issues, and external trade headwinds present key challenges for 2025.

It is crucial to recognize that the data provided by the General Statistics Office is the only official source, and its accuracy is often questioned. The lack of independent verification makes it difficult to assess the true economic situation, raising concerns about transparency and reliability.

Key Policy Recommendations:

1. Enhancing Business Confidence: Implementing financial incentives and regulatory simplifications to encourage more startups.
2. Sustainable Resource Management: Stricter deforestation policies and investment in renewable energy.
3. Boosting Domestic Consumption: Supporting local enterprises and consumer spending through targeted stimulus programs.
4. Expanding Digital Economy Infrastructure: Encouraging tech-driven innovation to offset industrial slowdowns.
5. Strengthening Statistical Transparency: Allowing independent data verification to improve economic transparency and policy credibility.

By taking proactive measures, Vietnam can enhance its economic stability and long-term growth in a progressively complex global economic environment.

Allie Le

Vanguard Business Information (VBI)