Vietnam lacks structures to absorb capital for growth: Deloitte

Duong Thanh Tung, partner for strategy, risk and transactions advisory services at Deloitte Vietnam, made the comment at a seminar on mobilizing capital for double-digit growth organized by Lao Dong (Labor) newspaper.

Vietnam aims to achieve sustained double-digit growth in the coming years, which would require total social investment to rise to about 40 percent of gross domestic product (GDP) and the incremental capital-output ratio (ICOR) to fall to about 4.8 during 2026-30.

Pham Thi Thanh Tam, deputy director general at the financial institutions department of the Ministry of Finance of Vietnam, said total social investment in the period would need to reach about VND38.5 quadrillion (US$1.5 trillion), more than double the level recorded in 2021-25.

Vietnam’s total investment has remained at about 32-34 percent of GDP in recent years, she said.

Tam said economies that maintained high growth for long periods recorded higher investment ratios, including South Korea at about 35-38 percent of GDP during 1970-90, Singapore at 35-40 percent, and China at 40-45 percent between 1990 and 2015.

The government has also set a target to reduce the ICOR to about 4.8 in 2026-30, from an average of around 6.3 in 2021-25, she said.

To support the growth target, public investment would need to rise by about 22 percent annually, domestic private investment by 20 percent, and foreign investment by about 18 percent, Tam said.

“Double-digit growth cannot rely solely on the state budget but must be driven by both the domestic private sector and high-quality foreign investment,” she said.

Tam said developing capital markets would be key to mobilizing long-term funding, with authorities focusing on strengthening stock and bond markets while protecting investors.

Tung of Deloitte Vietnam said long-term capital typically comes mainly from private investors through equity stakes, debt instruments, mergers or restructuring deals, particularly in sectors such as finance, energy, infrastructure, consumer goods, and technology.

Such investors also require reliable exit channels, including initial public offerings, transfers or refinancing through capital markets, he said.

Tung added that establishing an international financial center could help strengthen Vietnam’s position in global financial transactions and support companies seeking overseas investment.