Vietnam Harnesses Infrastructure Investment to Drive Economic Growth

The Vietnam National Statistics Office (NSO) estimates that the newly announced U.S. tariffs of 20% will reduce Vietnam’s GDP growth by 0.7-0.8 percentage points from previous projections. Despite this, the government has raised its ambitious GDP growth target for 2025 to 8.3%, up from the initial 8% set in February.

The Government of Vietnam’s bullish outlook is further underscored by ASEAN+3 Macroeconomic Research Office (AMRO)’s latest projections, which downgraded growth for nearly all regional economies but raised Vietnam’s forecast to 7% in 2025—the highest among ASEAN+3 nations, compared to just 3.8% for the region overall.

To support this ambitious growth target and reduce reliance on volatile external drivers such as exports and foreign capital, Vietnam’s government is pivoting toward supporting domestic investment, with infrastructure development at the heart of its strategy.

On August 19, Prime Minister Phạm Minh Chính inaugurated 250 major infrastructure and housing projects valued at 1.28 quadrillion dong (approximately US$49 Bn). The launch ceremony, attended by top political figures including General Secretary Tô Lâm and former Prime Minister Nguyễn Tấn Dũng, underscored the strategic importance of these initiatives. Prime Minister Chính described the effort as essential to “reversing the situation and transforming the state of Vietnam’s infrastructure.” The scope of the initiative is sweeping. It includes 59 transportation projects encompassing airports, railways, and roads; 57 industrial developments; 36 technical infrastructure projects; and a range of housing and urban upgrades. Funding will be sourced from both public and private sectors, with the state contributing 37% and the remaining 63% coming from other channels, including domestic and foreign investors.

A centerpiece of the transportation projects is the groundbreaking of Gia Bình International Airport, overseen by the Ministry of Public Security. With an investment of nearly 121 trillion VND (around US$4.6 Bn), it ranks among the largest “mega-projects” of this round. Planned as a Class 4E dual-use strategic airport in the capital region, it will serve both civil aviation and the Air Force Regiment of the People’s Public Security. The airport is scheduled to begin operations by late 2026 to support APEC activities in 2027, with capacity projected at 30 million passengers (about the population of Texas) annually by 2030 and 50 million by 2050.

Vietnam’s approach, mitigating external vulnerabilities while ramping up domestic investment, marks a bold pivot in its economic direction. If executed effectively, it could transform Vietnam into the next “Asian tiger,” and redefining its regional standing.