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Headlines:
Economic Growth Defies Natural Disasters
FTSE Russell Upgrade to Open Investment Spigot
Trade Surplus Heading for Record $20 Billion
Big Banks Share Cash Dividends After Hiatus
FDI Inflows Steady, Especially from Asia
Tech Sector Expansion Speeds Up
Infrastructure Investment Wave
Regulatory Reforms Streamline Operations
Natural Disasters Test National Mettle
Green Energy Transition
Real Estate and Housing Markets Under Pressure
International Partnerships Ongoing: JP, DE, NL
Economic Growth Defies Natural Disasters
The economy is on track to meet the government’s full-year growth target despite a pair of typhoons causing a bit of a setback. Growth has so far picked up speed in each quarter this year, reaching 8.23% in Q3, the second-highest pace in a decade, with the workhorse sectors of manufacturing and processing delivering an almost 10% rate. To meet the full-year target of at least 8.3%, the final quarter of the calendar year needs to show at least 8.4%. The World Bank says that it expects only 6.6% growth for the year, although that would be the highest of East Asian developing economies; forecasts from other corners are between 6.5% to 7.5%.
Read more: VIR (Growth Target), Vietnam News (World Bank Projection), VnExpress (Q3 Results), Vietnam Insiders (International Recognition)
FTSE Russell Upgrade to Open Investment Spigot
FTSE Russell still plans to upgrade Vietnam to emerging market status on September 21 of next year, a decision that is likely to unlock billions in foreign investment. The benchmark VN Index once again hit a record high on the announcement, climbing 2% before settling 0.7% higher. The yardstick remains up more than a third year-to-date. The upgrade could redirect $3.4 billion to $6 billion in foreign inflows, including a cool $1.5 billion from passive funds alone. The reclassification is the result of years of capital market reforms, improved market infrastructure, and clearer regulations that align with international standards.
Read more: MSN (Upgrade Details), The Investor (Reform Impact), VIR (Market Reaction), MSN (Investor Optimism)
Trade Surplus Heading for Record $20 Billion
Trade is expected to best $900 billion in 2025. Barring any surprise upsets, the final year-end trade surplus should come in at more than a record $20 billion. Manufacturing and processing sectors brought almost two-thirds of total registered FDI, and agro-forestry-fisheries are at $52.31 billion YTD. Coffee exports were up 61% to almost $7 billion, but rice exports saw values dropping almost a fifth despite stable volumes. The Ministry of Industry and Trade is starting new free trade negotiations with the Gulf Cooperation Council and Mercosur, starting this month.
Read more: VIR (Trade Turnover), VN Economy (Agro Exports), VN Economy (Pangasius Opportunities), VIR (Export Growth)
Big Banks Share Cash Dividends After Hiatus
Several banks are paying out cash dividends in October and November, a shift away from the previous austerity that was put in place to shore up capital positions. Vietcombank will pay 4.5% ($150.4 million) on October 24, and BIDV and VietinBank will distribute 4.5% dividends ($126.36 million and $96 million, respectively) in mid-November. Techcombank finalized a 10% cash dividend totaling $283.4 million, and LPBank is going to share a 25% payout worth $298.7 million. HDBank said there was potential for a 15% cash dividend pending shareholder approval. The State Bank of Vietnam began relaxing dividend restrictions in 2023 for financially sound banks after years of requiring improved capital buffers and a backstop against rising bad debts.
Read more: Vietnam News (Dividend Schedule), VIR (Financial Health)
FDI Inflows Steady, Especially from Asia
Foreign direct investment totaled more than $26 billion from January to August, a 27.3% increase year-on-year. China remains the biggest player. Total FDI from China was $28.54 billion as of the start of this month. Japanese firms are also re-upping commitments, with Qualcomm reporting that 12% of its $38.96 billion 2024 revenue can be credited to Vietnam, the company’s second-largest revenue source globally. New investments include Swedfund’s $15 million in Excelsior Capital Vietnam Fund II and Marmon Fastener’s factory lease in Dong Nai Province for North American screw manufacturing.
Read more: VN Plus (FDI Growth), VN Plus (Chinese Investment), The Investor (Qualcomm), VnExpress (Berkshire Hathaway)
Tech Sector Expansion Speeds Up
The VietLeap AI Accelerator started up in Hanoi on October 4, supporting a handful of early-stage AI startups with infrastructure, mentorship, and funding. A June 2025 report foresees AI adding $130 billion to the economy by 2040. Qualcomm opened a major R&D center in Hanoi staffed entirely by Vietnamese engineers who will be working on artificial intelligence applications. Gaming was officially recognized as one of 12 cultural industries, with the Ministry eyeing $2.4 billion in revenue by 2029, up almost two and a half times from the current $1 billion.
Read more: Open Gov Asia (VietLeap), VIR (Semiconductors), Vietnam Net (Talent Gap), Asia Media Centre (Gaming Industry), VIR (Cybersecurity)
Infrastructure Investment Wave
Danang pulled in $5.62 billion in domestic and $307.3 million in foreign investment through August, playing host to more than 1,200 foreign-invested projects worth nearly $11 billion. Authorities called for Dutch investment in Chu Lai International Airport (designated 4F-class with construction expected to start early next year under a PPP model), and maritime projects (including Lien Chieu port). The Lien Chieu deep-sea port project was approved with a price tag of $1.76 billion and will feature eight berths that will be able to handle 18,000 TEU ships. Bac Ninh Province approved nine new industrial parks with more than $700 million of registered capital, bringing the total to 33 parks over more than 10,000 hectares (currently 56% occupancy).
Read more: VIR (Danang), The Investor (Airport Investment), Vietnam News (Port Project), Vietnam News (Industrial Parks)
Regulatory Reforms Streamline Operations
The Ministry of Finance is reviewing amendments to eight financial laws, including corporate income tax and the VAT, to encourage investment into digital platforms. State budget revenue for September was ($6.2 billion), a number that is, helpfully, already 97% of the full year target.
Read more: VIR (Financial Reforms), VIR (ODA Management), Tuoi Tre News (IRC Procedures), Business Times(Monetary Policy)
Natural Disasters Test National Mettle
Typhoon Bualoi made landfall on September 29, causing 51 deaths, 14 missing people, 164 injuries, and damage to more than 180,000 homes. Economic loss estimates are already coming in at more than $600 million. The typhoon moved at nearly twice normal speed, remaining inland for 13 hours, and caused embedded tornadoes that led to wild destruction. Typhoon Matmo brought record floods to northern areas last week, resulting in at least eight deaths with rivers reaching 40-year highs and economic losses already approaching $2 million.
Read more: VIR (La Niña), VnExpress (Bualoi Impact), ITIJ (Matmo), The Mountaineer (Flooding)
Green Energy Transition
Germany’s GIZ launched the CASE project on October 1, to support energy transition by building a sustainable, reliable energy system that is in alignment with the demands of the Paris Agreement. The project involves technology transfer, innovation development, and new research-business ties to improve participation in the global clean energy value chain. HDBank was able to float $50 million in international green bonds to the IFC on October 2, part of a planned $100 million program that will fund renewable energy projects that are expected to result in annual carbon emissions reductions in excess of 100,000 tonnes. Healthcare spending is expected to reach $33.8 billion by 2030. A domestic carbon market pilot continues to run until the end of 2028, and if everything goes to plan, it should be ready for full, regular operations by 2029.
Read more: VN Plus (CASE Project), VIR (Green Bonds), VIR (Carbon Credits), VIR (Carbon Market)
Real Estate and Housing Markets Under Pressure
Prime Minister Pham Minh Chinh told his ministries to improve housing supply and reduce prices as he tries to tamp down speculation and resolve supply shortages that are making housing unaffordable for an ever-larger share of the population. A goal was set to complete at least 100,000 social housing units within the year. The Ministry of Finance is being told to report back on property taxation and digital transformation performance by October 15, and the State Bank was told to direct more credit toward social housing while reining in lending for speculative projects. The Ministry is also taking another look at tax policies for real estate and gold to improve clarity, transparency, and compliance.
Read more: Vietnam News (Price Controls), VIR (Sun Group), The Investor (Alphanam), VIR (Tax Review)
International Partnerships Ongoing: JP, DE, NL
Japan’s Minister of Science and Technology led a delegation from October 2-5 to shore up cooperation in sci-tech, innovation, and digital change. Plans are afoot to send young researchers to Japan for semiconductor projects. JICA signed a $75 million loan with ECOM Agroindustrial on October 2 for sustainable coffee buying from more than 60,000 farmers across the Asia-Pacific. Can Tho was able to land 125 foreign direct investment projects, worth more than $7 billion, including 13 Japanese projects valued at $1.65 billion, to work on agro-processing, seafood, and renewable energy. De Heus is considering relocating its Asia headquarters to HCMC after acquiring CJ Feed & Care’s operations, including 17 feed mills. Germany and the Netherlands are looking into cooperation for smart city development, airport planning, and maritime infrastructure (see infrastructure story above for more).
Read more: VIR (Japan), VIR (JICA), Vietnam News (Can Tho), The Investor (De Heus), Vietnam News (Germany)
That’s it for this week!
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