As Vietnam moves beyond 2025, the economy is entering a highly distinctive phase: growth has clearly returned and is supported by solid fundamentals, yet the cycle is no longer in an “easy” stage. This is a period in which growth no longer automatically translates into profits, and advantages accrue to managers who clearly understand where they stand within the economic cycle.
Official macroeconomic data indicates that the economy is not only recovering but operating at a pace above its medium-term average, alongside rising demands for more rigorous risk management.
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Growth drivers: Industry – consumption – synchronized FDI
Industrial production continues to serve as the central pillar of growth. The Industrial Production Index (IIP) increased by 9.2% for the full year 2025, with Q4 posting a 9.9% year-on-year rise, while manufacturing and processing expanded by 10.5%. This strong and broad-based growth reflects genuine production demand and a clear improvement in order volumes, particularly in export-oriented sectors.
Alongside production, domestic consumption shows a recovery with real depth. Total retail sales of goods and consumer services for the year reached VND 7,008.9 trillion, growing 9.2% in nominal terms, equivalent to 6.7% in real terms. These figures suggest a tangible improvement in purchasing power rather than mere price effects, reinforcing the role of domestic demand as a stabilizing buffer for growth.
Most notably, foreign direct investment continues to play a critical role. In 2025, FDI disbursement reached USD 27.62 billion, up 9% year-on-year, with 82.8% allocated to manufacturing and processing. This composition underscores Vietnam’s positioning as a regional production hub, characterized by long-term, capacity-linked capital flows rather than short-term, opportunistic investments.
Stock market: An uptrend confirmed – but no longer cheap
The macroeconomic foundation outlined above has provided solid support for the equity market throughout the 2023–2025 period. From a medium- to long-term perspective, the VN-Index continues to maintain a clear uptrend, remaining above key moving averages and exhibiting a structure of higher highs and higher lows since mid-2023.
However, it is important to emphasize that the market is no longer in an early-cycle phase. The VN-Index has moved decisively beyond the prolonged consolidation range of 2022–2024 and is now approaching a long-term resistance zone of 1,880–1,900 points. Meanwhile, trading volume in recent weeks has not expanded proportionally with price gains, indicating growing caution among incremental buyers.
The widening gap between the index and medium-term moving averages reflects increasingly “stretched” market conditions. This is a typical characteristic of the late stage of an advance: the trend remains intact, but the margin of safety for new positions deteriorates rapidly, while the risk of technical corrections increases.
“Surface strength” and structural blind spots
A critical issue for decision-makers is the divergence between strength reflected in headline macro indicators and underlying structural conditions. Available data suggests that growth remains supported, with the full-year trade balance posting a surplus of USD 20.03 billion, albeit narrower than in the previous year.
Nevertheless, the absence of comprehensive confirmation regarding systemic liquidity, credit trends, and foreign exchange pressures increases risk asymmetry as both the economy and markets operate near the upper bounds of the cycle. In such environments, corrections are often triggered not by explicit negative news, but by abrupt shifts in expectations or financial conditions.
Strategic implications for managers and investors
For enterprises, the current environment presents opportunities to leverage industrial momentum and FDI inflows to strengthen core capabilities and enhance long-term efficiency. However, this is not an appropriate phase for expansion driven excessively by financial leverage or investments with limited safety margins.
For investors and portfolio managers, strategic priorities should gradually shift from maximizing returns toward preserving gains and managing risk. As the market enters a mature phase of the growth cycle, discipline and cycle awareness become more important than decision-making speed.
Conclusion
Vietnam is experiencing a phase of genuine growth, supported by relatively solid foundations in industry, consumption, and investment. However, much like the equity market, the economy is transitioning into a stage where each strategic decision requires more careful consideration.
Growth remains present and trends are still intact, but advantages no longer stem from enthusiasm. Instead, they arise from understanding the cycle and acting with discipline. This is the phase that separates those who merely “participate in the market” from those who truly master strategy.
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Reference: Socio-economic situation report, Q4 and full year 2025.