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In a global economy marked by strong volatility, Vietnam faces an urgent need to shift from simply expanding development capital to using capital more efficiently. Economic growth depends not only on the amount of investment, but also on how effectively it is deployed.
Increasing the scale of development investment is important for two main reasons. First, development investment is a tangible input that directly supports economic growth: without sufficient resources, the economy cannot expand productive capacity, upgrade technology, or raise labor productivity. Second, from an accounting perspective, development investment influences the size and growth rate of GDP. Vietnam’s development investment-to-GDP ratio has remained high for a long time, especially during 2001–2010, when it was among the world’s highest. This reflected the objective demand of transitioning from a centrally planned economy to a market economy while implementing industrialization and modernization.
In recent years, the investment ratio has trended downward. It is projected to be below 33% in 2025, creating a major challenge to achieving two-digit growth in the coming years. To meet this target, Vietnam needs to prevent further decline in the investment ratio and raise the development investment-to-GDP ratio to a higher level.
Current policy direction projects the ratio at around 39% in the coming years. The article notes that this is an ambitious target, requiring careful consideration of capital mobilization sources and potential side effects from increasing development investment.
The article highlights that one of the major challenges is funding, and the constraints differ depending on where investment capital comes from:
Expanding development investment can generate spillover effects, with inflation pressure identified as the most evident. To achieve high GDP growth, monetary and fiscal policies are often loosened. Without careful and coordinated management, these measures can raise inflationary pressure over the medium and long term.
Based on the analysis, raising the development investment-to-GDP ratio is necessary to support growth targets in the next period. However, the increase should be determined prudently to balance resource mobilization with managing side effects.
Accordingly, the article judges that a development investment-to-GDP ratio around 35% is more appropriate when considering both funding sources and macroeconomic stability. It concludes that prioritizing investment efficiency over mere scale expansion will help Vietnam achieve more sustainable and competitive growth internationally.
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