5 years of ‘fire testing gold’ of Vietnam’s economy

“From August until now, almost every meeting starts with a price reduction offer from partners. If it doesn’t reduce, they will leave,” Mr. Cao Huu Hieu, General Director of Vietnam Textile and Garment Group (Vinatex) said in the last days of 2025.

Partners who have been with Vinatex for 20-30 years also request a 20% reduction in unit prices. “After each negotiation, a new lower price level is established, at least 5% cheaper than before,” he shared.

Vinatex’s story reflects the general picture of Vietnamese businesses last year: efforts to maintain profit margins under pressure from US tariff policies, geopolitical conflicts or order shifts.

But 2025 is not the only year of “trial fire” for the business community. Looking back at the period 2021-2025, businesses were impacted by the pandemic, supply chain disruptions, geopolitical conflicts and inflation. As for textiles and garments, export turnover will decrease by 11% by 2023, to nearly 40 billion USD due to a decline in purchasing power in major markets (US, EU). In the 30 years of establishing Vinatex, Mr. Hieu said “the business has never faced such difficulties”.

However, in the context of “fire tests gold”, Vinatex still closes 2025 with a consolidated profit of VND 1,355 billion, exceeding 50% of the plan. “No unit has losses, only more or less profits,” Mr. Hieu said, saying the results come from streamlined management and accepting short-term sacrifices to preserve the market.

The resilience of the business community is one of the factors contributing to the economic recovery and regaining growth momentum. In the final year of the 2021-2025 term, Vietnam completed and exceeded 15/15 socio-economic targets.

GDP 2025 is estimated to reach about 8.02%, more than 3 times the growth rate in the first year of the 2021 term, among the highest in ASEAN and the world. Overall, over the past 5 years, average GDP increased by about 6.3% per year, higher than the previous term.

The scale of the economy in 2025 is estimated to reach about 510 billion USD, with GDP per capita up to 5,026 USD, making Vietnam an upper middle income country. The economy’s position on the global rankings also increased about 4-5 places, ranking 32nd in the world.

Dr. Le Duy Binh, Director of Economica Vietnam, acknowledged that the important foundation for a quick economic recovery is the executive’s steadfast goal of macroeconomic stability, while flexibly using fiscal, monetary, trade and investment tools.

“The strong involvement of the entire political system, along with the adaptability of businesses and people, has created significant resilience for the economy,” he told the newspaper. VnExpress.

In fact, after the Covid-19 pandemic, Vietnam chose a recovery model based on three pillars: domestic market, exports and public investment. In particular, public investment plays a leading role, activating private capital and FDI flows, promoting production and business. This source of money helps increase total social investment capital, supporting rapid and sustainable growth. According to calculations, in the period 2021-2025, disbursed public investment capital increases by 1%, GDP can increase by 0.058 percentage points.

This approach, according to Dr. Tran Du Lich, helps the economy recover in the context of many global fluctuations.

From a business perspective, Mr. Dang Thanh Tam, Chairman of the Board of Directors of Kinh Bac Urban Development Corporation (KBC), said that the process of restructuring the economy is clearly taking place. “Never before have investment decisions at ministries and localities been made as quickly as they are today,” he said.

Another pillar pointed out by Mr. Tam is economic diplomatic achievements. Establishing Comprehensive Strategic Partnerships with most major countries helps expand development space and attract high-quality FDI capital flows.

Businesses have more opportunities to diversify export markets, strengthen their position in the global supply chain thanks to completing new generation free trade agreements (FTAs) such as RCEP…, or signing bilateral FTAs ​​(Vietnam – UAE, Vietnam – Israel).

“Foreign investors are targeting the US market, starting to restructure exports to Europe right in Vietnam,” Mr. Tam said.

Vietnam targets double-digit growth by 2026. This is also a pivotal year in the next 5-year economic development plan, to create momentum to become a high-middle income country by 2030 and a high-income country by 2045.

According to Ms. Nguyen Thi Thu Hien, General Director of Techcom Securities (TCBS), the main growth drivers come from continued public investment and a clearer recovery of the private sector. These are important factors that help strengthen the production and business foundation.

Mr. Dang Thanh Tam commented that the core issue is improving capital absorption capacity, policy implementation and project implementation through unified planning. “Vietnam’s GDP can reach the top 10 in the world in the next decade,” he expected.

However, the challenge of achieving the double-digit GDP growth target is not small, in the context of increased strategic competition between major countries and continued restructuring of the global supply chain.

Vinatex leaders said the business no longer expects orders of “several million products” – once the “backbone” of the industry. Vietnamese textiles and garments are being positioned in the mid-high-end segment, requiring high skills, flexible production and the ability to handle difficult orders and continuously change codes in a short time. “Sometimes it only takes 2-3 days for the line to switch to a new product code, no longer having to do the same code for several weeks in a row,” Mr. Hieu shared.

To adapt, businesses are forced to change their strategies. Mr. Dang Thanh Tam cited businesses participating in developing social housing for workers with low profit margins, but in return is stable personnel for sustainable production. In addition, proactively preparing high-tech and clean energy infrastructure is also likened to building a “smart port to welcome large ships to dock”.

For manufacturing enterprises, Vinatex leaders said they are forced to continuously restructure and increase productivity to optimize costs, while keeping jobs for workers and ensuring profits. They also optimize resources by focusing on high-value products, instead of low-margin mass orders that are gradually shifting to countries with cheaper labor costs.

Mr. Nguyen Duc Hung Linh, Deputy General Director of AgriS Investment Division, acknowledged that green standards (ESG) and traceability requirements are becoming key factors determining the competitiveness of Vietnamese goods.

“Enterprises can only escape the “low scale – low profit trap” if they move up the value chain or participate directly in the global production chain,” Mr. Linh noted.

In this aspect, Mr. Dang Thanh Tam said green transformation will be a mandatory “passport” for businesses. Although costly, according to him, this is a necessary sacrifice for businesses to contribute to the common goal when Vietnam has committed to achieving Net Zero by 2050.