HANOI — Nguyen Ba Hung, principal economist at the Asian Development Bank in Vietnam, outlined the forces powering last year’s boom and the hurdles ahead. Exports led the charge, hitting $475.04 billion, up 17 percent from 2024. Domestic firms managed $107.95 billion of that total, a 6.1 percent drop that left them with 22.7 percent of the pie. Foreign-invested companies dominated, posting $367.09 billion, a 26.1 percent jump to claim 77.3 percent.

The numbers reveal stark divides. Vietnam booked a trade surplus over $20 billion overall. Yet domestic enterprises faced a $29.43 billion deficit. Foreign players countered with a $49.46 billion surplus. Hung expects export growth to cool in 2026. Global economic slowdowns will curb import demand from major markets. Rising competition among exporters adds pressure. U.S. tariffs, in place all year after starting in August 2025, will hit Vietnamese shipments hardest.

Disbursed foreign direct investment hit another high at $27.62 billion in 2025, or 5 percent of GDP—the best in five years. Manufacturing and processing drew the bulk. Much of this stems from prior-year registrations, which stayed strong in 2024 and 2025. Hung forecasts steady but slower disbursement growth next year, below the near-10 percent rise of 2025.

Public investment disbursed just over 80 percent of plans but still soared 27 percent year-on-year. That pace followed a weaker 2024. Repeating it in 2026, from a higher base, looks tough despite government pushes.

To reach 10 percent growth, Vietnam must ignite consumption and private investment. Consumption rose only 7 percent in 2025, matching 2024. Hung calls for bolder steps to boost domestic demand. Private investment hinges on reforms that cut business costs and red tape. Recent tax and regulatory tweaks have sometimes raised hurdles short-term. Effective rollout could ease them later, spurring higher-value activities.

Real estate restarts aided private investment last year. Broader sectors, especially domestic exporters, need more. Weakness there persists. Hung predicts ongoing struggles for consumption and private investment, complicating targets. Still, export manufacturing holds firm on external demand. Services add domestic lift. Better public spending on priority transport projects should bolster activity.

Risks loom large. Natural disasters, currency slides, tepid spending at home and global wild cards demand sharp policy responses.

Hung praises recent monetary policy as well-calibrated. Interest rates sit near inflation levels, limiting cut room. Credit grew 19 percent in 2025; the 2026 target drops to 15 percent. Open market operations and bank liquidity support remain tools. Bank loans hit 145 percent of GDP by late 2025. Corporate bonds lagged at 10 percent.

Building bond and equity markets matters, Hung said. They would channel funds to firms, easing bank strains and enabling medium-term financing.

Vietnam’s new growth blueprint centers on high-tech and innovation—semiconductors, AI and beyond. This pivot from input-heavy expansion to efficiency-driven gains fits the moment. Labor supplies tighten as the demographic dividend fades; fertility and population growth dip. Endless capital ramps won’t cut it. Science, technology, innovation and better management must lift output without more inputs. Management upgrades top the list, according to Hung.