A production line at Asia Italian Door Co Ltd in HCM City.— VNA/VNS Photo

As the lifeblood of the economy, capital flows play a decisive role in ensuring sustainable growth alongside labour, science and technology, institutions and the investment environment.

According to Nguyễn Tú Anh, PhD, director of Policy Research at VinUni University, the scale of credit in the economy needs to double over the next five years for Việt Nam to consistently achieve annual GDP growth of 10 per cent or more.

With an estimated 10 per cent real growth and around 3 per cent inflation, nominal growth would reach about 13 per cent. In this scenario, credit must expand by at least 15 per cent annually, two percentage points higher than nominal GDP growth, to sustain momentum.

Transactions at Vietcombank. Banks continue to have clear advantages in providing long-term financing, assessing credit risks and absorbing shocks. —VNA/VNS Photo Trần Việt

The calculations reaffirm a familiar truth: Việt Nam remains a bank-based economy, and this structure will continue to remain dominant for at least the next 15 years. Despite the development of the capital market, including equities and corporate bonds, banks continue to have clear advantages in providing long-term financing, assessing credit risks and absorbing shocks.

This is rooted in the nature of the financial sector. Capital markets require investors to independently assess risk, a challenge in an institutional environment still undergoing continuous refinement.

Meanwhile, banks specialise in collecting and processing information, evaluating borrowers and managing risk. With rapid digitalisation, banks have gained more tools – particularly access to large datasets – that allow them to expand lending efficiently and reach new customer segments with lower costs.

“Clearly, the role of the banking system in the economy is extremely important,” he said.

Credit shifts

A similar view is shared by Quản Trọng Thành, head of Research at Maybank Securities Vietnam.

Việt Nam’s corporate credit sector still has significant room to grow. With credit equivalent to about 134 per cent of GDP and business lending accounting for less than 80 per cent of GDP, the structure remains relatively healthy compared to peer economies.

From 2013 to 2022, retail lending expanded rapidly, becoming a core driver of credit growth. However, the post-2022 period saw macroeconomic conditions shifted and consumer demand softened, credit has been flowing back to businesses, particularly since early 2024. This transition marks a return to fundamentals: enterprise credit is again becoming the engine of economic expansion.

Investment patterns reflect a similar pivot. Between 2020 and 2024, total social investment reached around US$682 billion, with manufacturing taking up the largest portion. Although FDI remained the main contributor to manufacturing investment, funded largely through overseas banks, the domestic banking system still provided 44 per cent of total investment capital.

Among these, the three State-owned commercial banks – VietinBank, Vietcombank and BIDV accounting for 60 per cent of total market share – limited the space for joint-stock banks and pushed them to focus more heavily on retail lending.

But as Việt Nam enters a new growth cycle, Thành said he believed corporate credit, particularly for private enterprises, would be the most promising direction. Industrial expansion, infrastructure upgrades and the green energy transition would all require large-scale financing that retail lending cannot fulfil. The economy’s next leap would depend on this shift.

In the short term, two sectors would stand out: infrastructure and energy. According to Ministry of Finance estimates, Việt Nam would need around $1.4 trillion in investment from 2026 to 2030 to maintain annual GDP growth of 10 per cent. FDI would contribute only US$24–30 billion per year, meaning the remaining $250 billion must come from domestic financing, particularly State-run and private enterprises.

"This creates an unprecedented opening for private capital. The Government is encouraging private sector participation in national infrastructure, energy and transport projects. The pie is expanding, and the level of private participation is increasing,” Thành said.

Banks are ready to accompany these projects as long as enterprises demonstrate capacity and project feasibility, according to Thành.

This evolving relationship between private investors and the banking sector promises to form an efficient capital circulation loop, allowing resources to flow more seamlessly into the projects that will shape Việt Nam’s economic trajectory for decades.

Growth outlook

Việt Nam is on track for GDP growth of around 8 per cent in 2025, supported by several strong pillars. Economic activity has been robust: trade in the first 10 months reached $762.4 billion, up 17.4 per cent year-on-year, with a trade surplus of nearly $19.56 billion. Exports grew 16.2 per cent while imports rose 18.6 per cent, reflecting strong domestic demand and production activity.

Monetary easing has also contributed. Credit expanded 15 per cent by the end of October, aided by stable lending rates. Industrial production rose 9.2 per cent, including a 10.5 per cent surge in manufacturing, showing clear signs of a broad-based recovery driven by demand for production inputs and export orders.

Business confidence is also strengthening. So far this year, Việt Nam has seen 255,900 newly established or reactivated enterprises, a 26.5 per cent increase, far outweighing the number of firms exiting the market.

However, the growth target for 2026 is significantly more challenging. The global economy continues to face headwinds from geopolitical tensions, policy shifts in major economies and uncertainties in trade and investment flows. Việt Nam has never achieved two-digit GDP growth, underscoring the scale of the task ahead.

Construction of the southern section of Thái Bình City’s Ring Road 2 under way. Public investment will be a major engine for the country's growth in 2026. —VNA/VNS Photo

Domestic consumption is expected to play a larger role in 2026. Anticipated new stimulus packages may lift household spending, complemented by tax reforms that take effect from the 2026 tax year. Personal income tax deductions increase, while the VAT rate of 8 per cent is set to remain in place until the end of 2026.

Public investment will also be a major engine. Large-scale infrastructure projects including Long Thành International Airport, expressways, rail links, and the Ninh Thuận nuclear power plant are set to accelerate. The Government plans to allocate VNĐ8.5 quadrillion (US$322 billion) in public investment during 2026–30, compared with VNĐ2.87 quadrillion ($108 billion) in 2021–25.

Private investment is expected to strengthen as well, supported by national resolutions promoting science, technology, innovation and digital transformation. At the same time, monetary policy is expected to remain accommodative, with credit growth forecast at 20 per cent or more in 2026.

Formalising the informal economy will also contribute to growth. A recent decision by the Ministry of Finance aims to modernise tax administration for household and individual businesses, fostering greater transparency and integration into the formal sector.

Developing Việt Nam’s capital channels in the coming years will require a careful balance: maintaining the central role of banks while cultivating a stronger, more transparent capital market.

Director Anh underlined that banks would remain the backbone of Việt Nam’s financial system for at least the next 15 years.

At the same time, Thành at Maybank Securities Vietnam highlighted the opportunities emerging from business lending, infrastructure development and the energy transition.

If these channels develop in harmony, he said, Việt Nam would be well positioned to pursue sustainable, balanced growth each year and build a financial system capable of supporting a new phase of national development. —VNS