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Headlines:
Rare Earth Strategy Shapes Up
Leadership Consolidates Power at Speed
Steady Growth Expected Through 2027
Manufacturing PMI Holds Firm Despite Storm
Green Transition Needs $28 Billion by 2030
Infra Bonds to Fill Quarter Trillion Dollar Gap
Tax Reform Targets Home Biz and Personal Income
Digital Transformation for Government
Banking Under Liquidity Pressure
Friendly with Laos, China, Despite Tech Tensions
Foreign Partnerships Support Investment Pipeline
Natural Disasters Drive $3.2 Billion in Losses
Rare Earth Strategy Shapes Up
The Ministry of Agriculture and Environment plans to put forward a national rare earths strategy to the government early next year, in a move that would set up a closed manufacturing chain to limit raw material exports. Minister Tran Duc Thang said that the country is home to one of the world’s largest rare earth reserves. The draft law on Geology and Minerals includes a dedicated chapter on rare earths that includes management rules. Some legislators are keen to figure out how to master rare earths management for national defense and security, going as far as saying that geological data should be a state secret.
Read more: VIR (Export Limits), VN Economy (Parliamentary Discussion)
Leadership Consolidates Power at Speed
Party General Secretary To Lam has lost no time consolidating power, reversing the cautious approach we saw during his predecessor’s anti-corruption campaign. The bureaucracy is now focused on speed. Control has shifted toward the Ministry of Public Security, which has deep influence across the government, creating a more decisive but potentially less transparent governance structure. Economic indicators remain positive: GDP growth is expected to be close to 8% and investment is making a rebound, but the centralized authority increases risks for innovation. The upcoming Party Congress will be where we see if the government can successfully lock in policies and keep up this accelerated pace of governance.
Read more: Lowy Institute
Steady Growth Expected Through 2027
The OECD upgraded GDP growth forecasts to 6.2% for 2026 and 5.8% for 2027, thanks to local macroeconomic stability. The economy was able to grow 8.2% in Q3 2025, on robust consumption and strong exports. Unemployment is at 2.2%, which creates a tighter labor market than is probably ideal. Exports are up 15.5% so far in 2025, with the US market making up about a third of total exports despite high tariffs. FDI is keeping on the same upward arc it’s been on since mid-2023. Risks include slowdowns in global trade and policy shifts that would affect export competitiveness. Regulatory reforms could improve productivity, particularly through better service market competition.
Read more: OECD Report via VN News (Forecast Details), VIR (Growth Moderation)
Manufacturing PMI Holds Firm Despite Storm
The Manufacturing PMI came in at 53.8 in November, down a touch from 54.5 in October, but the fifth consecutive month of improved operating conditions. New orders contributed to production growth, though expansion rates moderated. New export orders rose to a 15-month high on rising demand from mainland China and India. Stormy weather brought disruption to production and supply chains during November, leading to higher-than-normal delivery times and increased raw material costs. Optimism for future production reached a 17-month high; nearly half of respondents expect higher output.
Read more: VN Economy (PMI Report), VN News (Storm Impact), VN News (Electronics Exports)
Green Transition Needs $28 Billion by 2030
Prime Minister Pham Minh Chinh remains committed to getting the nation to net-zero emissions by 2050, but said that about $28 billion is needed to make it happen. The government is preparing legal frameworks to bring more global green capital and technology. At the Autumn Economic Forum 2025, participants were hopeful that Vietnam would be able to become a regional center for green logistics and renewable energy. The National Action Plan on Pollution Remediation and Air Quality Management for 2026-2030 is targeting PM2.5 levels in Hanoi under 40 μg/m³ by 2030, which would be a 20% reduction from 2024 numbers. Emission controls are expected to tighten across the board. The plan includes creating a National Air Pollution Warning and Forecasting System as well as the construction of 1,200 certified green buildings by 2030.
Read more: Reccessary (Funding Needs), ESG News (Cooling Plan), Vietnam Briefing (Air Quality), VIR (Policy Framework)
Infra Bonds to Fill Quarter Trillion Dollar Gap
Analysts estimate the country will need about $245 billion for infrastructure projects by the end of this decade (it’s coming fast!). Major projects moving forward include the North-South high-speed railway with an estimated cost of $67 billion, and 33 airports with an annual capacity of 297 million passengers by 2030 that will need $19 billion. Public investment capital is likely to be able to cover only about 70% of the need; infrastructure bond sales are expected in order to support long-term project capital needs. The banking system’s ability to provide long-term loans is being held back by maturity pressure and Basel III requirements. The Ministry of Finance wants to see the insurance sector buy recapitalized bonds to make way for further market expansion.
Read more: VN News (Bond Strategy), VN Economy (Railway Investment), VN Economy (Airport Plan), VN Economy(Expressway Funding)
Tax Reform Targets Home Biz and Personal Income
In response to public dissatisfaction with the status quo, the Ministry of Finance is considering taxing household businesses on profits instead of total revenue. Businesses with annual revenues below VND3 billion that are able to determine expenses would pay a 15% tax on profit, the same as the current corporate tax rate. Those unable to determine costs would remain on the revenue-based system but could deduct a tax-free threshold before getting taxed. The tax exemption revenue threshold is suggested to rise from VND100 million to VND200 million. The country has about 5.2 million household businesses that contribute VND26 trillion to the state budget.
Read more: VN News (Household Tax), VN News (Exemption Threshold), VIR (Personal Income Tax)
Digital Transformation for Government
Prime Minister Pham Minh Chinh signed Decision 2629/QD-TTg, which approves a Digital Government Development Program to move to a “fully digital government” by 2030. From 2025 to 2027, 100% of eligible administrative procedures are expected to be moved to allow for online processing. From 2028 to 2030, citizen satisfaction with online services should reach 99%. The plan mandates 25% of leadership positions in digital arenas and requires all agencies to deploy at least one AI application by 2030. Six circulars guiding the Law on Digital Technology Industry were released in November, all of which will become effective on January 1, covering semiconductor production, digital technology products, and tax incentives.
Read more: VN Economy (Digital Government), VN Economy (Technology Regulations), VIR (Digital Economy)
Banking Under Liquidity Pressure
More than 20 banks have raised deposit rates because of tightening liquidity and rising interbank rates. Banks, including Vietcombank, Techcombank, and VPBank, have tweaked rates, particularly for mid-term deposits. Common deposit rates for 12-18 month terms range from 4.7-5.3%, with some smaller banks offering up to more than 6%. The State Bank has made several liquidity injections as average interbank offered rates have risen by up to 70 basis points (Note: the source article refers to the moves as being “0.7” basis points, but that cannot be correct). Current lending rates for new loans stand at about 6.55%, also upward. Total outstanding credit was reported to be $725.6 billion as of November 21, up 16.15% year-to-date, and total deposits are $685.68 billion, up 12% year-to-date. Banks are hamstrung by high rates for foreign borrowing; effective costs are 6.7-6.8%. Bad debt saw an improvement- the ratio dropped a hair from 2.04% in Q2 to 2.01% in Q3.
Read more: VIR (Rate Increases), VN News (Bad Debt), VN News (Growth Impact)
Friendly with Laos, China, Despite Tech Tensions
Party General Secretary To Lam and his Lao counterpart Thongloun Sisoulith saw the swap of bilateral cooperation documents in Vientiane this week during a state visit to celebrate the 50th Lao National Day. Trade with Laos is up 50.4% so far this year, totaling nearly $2.5 billion. Vietnam has 274 projects in Laos with total registered capital of $5.6 billion. In a separate development that’s raising US eyebrows, contracts totaling more than $43 million were awarded to Chinese telecom companies Huawei and ZTE for 5G equipment in late November, shortly after US tariffs on exports came into force. Vietnam has also launched a pilot scheme for cross-border QR payments with China that will pave the way for Chinese tourists to use UnionPay apps at more than 30,000 merchants by year-end.
Read more: VN Economy (Laos Visit), VN Economy (Bilateral Meeting), Asia Financial (5G Concerns), VIR (Payment System)
Foreign Partnerships Support Investment Pipeline
Germany has promised €185.5 million ($216 million) for development projects over the next two years, with €25.5 million for advisory projects and €160 million for sustainable business investments. Japan remains committed to capital market development, as it celebrates 20 years of Japan-ASEAN Financial Technical Assistance. Czech investor CTP Group signed an MOU that commits a billion euros to high-tech industrial parks in Hai Phong. Russian oil and gas group Zarubezhneft wants to build an energy center that goes beyond traditional oil and gas operations. New Zealand announced a 3 million NZD aid package for storm and flood recovery and signed an Action Plan for 2025-2030 to support their bilateral Comprehensive Strategic Partnership.
Read more: VN Economy (Germany), VIR (Japan), VN Economy (Czech Republic), The Investor (Russia), OANA (New Zealand), VN News (EU)
Natural Disasters Drive $3.2 Billion in Losses
Natural disasters have resulted in 409 deaths or disappearances and more than $3.2 billion in estimated losses this year. The Disaster and Dyke Management Authority has counted 14 storms and 5 tropical depressions in the East Sea, fires that are getting close to the 2017 record of 20 atmospheric disturbances. Scientists are pushing for improved forecasting and village-level alerts. Proposals include a new early-warning platform that would take stock of village risk levels using rainfall data. The government has started talks with Japan to figure out how to improve disaster risk management and build infrastructure that is going to be more climate-resilient. Japan has proposed tech solutions, including Digital Twin modeling, AI use, and satellite observation.
Read more: Asia Insurance Review (Economic Impact), Asian News Network (Alert Systems), AgTech Navigator (Japan Cooperation)
That’s it for this week!
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