Comprehensive support package needed for Vietnamese economy

Many experts and business leaders have proposed measures similar to those Vietnam implemented in previous economic support packages during difficult periods.

To help companies weather current challenges, Pham Quang Anh, director of Dony Garment Production Company, told Tuoi Tre (Youth) newspaper that beyond ensuring stable supplies of essential commodities such as fuel, the most critical factor now is maintaining business cash flow.

The government could provide support through tax reductions, tax payment extensions or interest rate subsidies on bank loans.

Having sufficient cash reserves would allow companies to purchase raw materials quickly when suppliers require immediate payment and to better handle unexpected market fluctuations.

Besides, firms expect administrative procedures to be streamlined, while special mechanisms should be activated to resolve bottlenecks quickly during this period of rapid market changes.

Pham Binh An, deputy head of the Ho Chi Minh City Institute for Development Research, said that to achieve high growth amid global uncertainty, the city must implement multiple coordinated solutions from the start of the year.

Ho Chi Minh City should prioritize resources for key national and local infrastructure projects, particularly transportation networks, logistics systems, and high-tech industrial zones across the regional economic corridor that includes Binh Duong and Ba Ria–Vung Tau.

At the same time, authorities must accelerate the resolution of issues related to administrative procedures, land use, and site clearance.

Special mechanisms under Resolution 98, which outlines pilot policies for the city’s development, and related adjustments should be applied to shorten project approval timelines.

The city should also support businesses in boosting production during the first quarter to take advantage of the temporary 15-percent tariff rate applied by the United States, which could change after roughly 150 days.

In addition, exporters should diversify markets and make greater use of trade agreements to expand into the European Union, Japan, and South Korea.

Local authorities should organize trade promotion programs early and help small- and medium-sized enterprises improve supply chain transparency and complete certificates of origin to avoid risks of anti-circumvention investigations.

Large-scale consumer stimulus campaigns tied to shopping events and festivals in Ho Chi Minh City should also be implemented.

An underlined that the city must keep prices stable to support domestic consumption while ensuring reliable energy supplies.

Coordination between major energy firms such as Petrolimex and PetroVietnam is needed to maintain stable supplies of fuel and gas.

Measures such as activating strategic energy reserves, seeking alternative supply sources when necessary, monitoring price movements and promoting energy-saving initiatives should also be considered.

3 key growth drivers

Ongoing tensions in the Middle East, particularly involving Iran, have contributed to strong fluctuations in global energy markets.

Global energy prices have surged since military tensions involving the United States, Israel, and Iran escalated in the Middle East in late February, disrupting shipments through the Strait of Hormuz, a key route for about one-fifth of global oil consumption.

On stock markets, such geopolitical instability often makes international investors more cautious, especially toward emerging economies.

Michael Kokalari, chief economist and head of macroeconomic and market research at VinaCapital, said Vietnam’s economy faces high expectations in 2026.

After expanding by roughly eight percent in 2025, the country’s GDP growth this year could reach around 10 percent.

According to Kokalari, the outlook is supported by three main drivers, including infrastructure investment, exports and institutional reforms linked to the private sector.

Vietnam’s public debt remains relatively low compared with many economies in the region, leaving room for fiscal expansion to accelerate infrastructure spending.

However, rising oil prices could increase transportation, logistics and manufacturing costs, creating cost-push inflation pressures.

This makes economic management more complex as policymakers try to maintain growth while stabilizing prices.

Kokalari also highlighted expectations for institutional reform.

Policy changes could add roughly two percentage points to long-term GDP growth, he said.

Emerging sectors such as investment in data centers, transit-oriented urban development, energy and financial services offer new growth opportunities but also require a flexible and predictable regulatory framework.

From the business perspective, Vo Phi Nhat Huy, chairman of Big Group Holdings Investment JSC, said that the main bottleneck is not policy itself but the quality of policy implementation and governance capacity.

Without greater consistency in enforcement and lower compliance costs, many investment decisions may continue to be delayed.

He also insisted on protecting and encouraging officials and entrepreneurs who are willing to take initiative.

Companies shift to defensive mode, search for new opportunities

Anh from Dony Garment Production Company said that the biggest challenge for firms is not simply high material costs but the constant and unpredictable fluctuations in those prices.

He cited a large order bound for Africa as an example.

Although the client requested a quotation to finalize the contract within a month, the company declined to commit because of the uncertainty.

If the quoted price is too high, the customer may walk away.

Yet, if it is too low and material prices rise the next day, the company could face significant losses, he shared.

As a result, Dony asked the client to wait several more weeks until market trends become clearer.

For orders signed before the Lunar New Year holiday in February, the firm has had to renegotiate terms with partners to share risks.

For instance, one shipment to the United States saw production costs increase by about US$0.30 per item.

Dony negotiated with its partner to split the additional cost, each side bearing $0.15.

Even so, the company’s profit margins have dropped sharply.

Amid unstable raw material markets, Anh said Dony’s long-term strategy is to prioritize contract manufacturing.

Instead of sourcing raw materials independently, the company will focus on labor-intensive processing, with customers supplying the materials themselves.

This approach helps the firm avoid the impact of fluctuating prices for fabric, plastic and other inputs while maintaining steady production levels.

Other companies in the garment sector also said that the biggest challenge is purchasing raw materials.

Some suppliers now refuse to sell based on promises or delayed payment contracts, demanding full upfront cash payment before delivering goods.

Risks to watch

Dr. Chu Thanh Tuan from RMIT University said that recent developments in global energy markets highlight how sensitive Vietnam’s economy remains to external shocks.

Maintaining fiscal discipline and closely monitoring the banking system will therefore be crucial.

VinaCapital’s 2026 strategy report also suggests that Vietnam’s growth picture is uneven.

Domestic consumption, which accounts for more than 60 percent of the GDP growth, is recovering slowly as households continue to prioritize savings.

Another concern lies in the liquidity of the banking system.

In 2025, credit growth reached about 19 percent, while deposit growth rose only around 15 percent, creating a significant gap of roughly $40 billion.

This imbalance has already pushed deposit interest rates higher and could continue to exert upward pressure throughout 2026.