Public investment may contribute 1 per cent to GDP growth.
In his latest report released on February 25, Michael Kokalari, chief economist of VinaCapital said that Vietnam’s government increased its 2025 infrastructure spending target from 6 to 7 per cent GDP last week and simultaneously lifted its GDP growth target for 2025 from 7 to 8 per cent.
“The infrastructure investment in Vietnam by nearly 40 per cent this year, to $36 billion (up from the $31 billion originally approved late last year), should help offset the hit to the country’s GDP growth we expect from slower export growth to the US, following a 23 per cent surge in Vietnam’s exports to the US last year.
He further added that the increased 1 per cent GDP of planned spending on infrastructure projects should help the country achieve the government’s new, 1 per cent higher 2025 GDP growth target and will also support the country’s long-term growth prospects and appeal to foreign investors.
Kokalari’s report emphasised that the government has initiated and approved investment policies for many large-scale infrastructure projects.
Several large projects were initiated/approved over the last two months, including a $67 billion high-speed rail line that would span the length of the country and the $8 billion Lao Cai–Hanoi–Haiphong railway project.
Source: VIR
