The finance industry boasts a prestigious history, prepared to expand in synchronicity with the country's growth.
Vietnam's Finance Sector Aims for Modernization and Upper-Middle-Income Status
The Vietnamese finance sector is gearing up for a significant transformation as it celebrates its 25th anniversary and looks ahead to becoming a modern industry. Minister Nguyen Van Thang has outlined key tasks and solutions to achieve this goal, as discussed in recent policy discussions and government directives.
The Ministry of Finance (MOF) has drafted two economic growth scenarios for 2025, aiming for GDP growth rates of 8-8.5%, with GDP per capita rising to about $5,000. This economic momentum is critical for the sector’s development and modernization. The target is to advance toward a higher growth rate of 10% or more by 2026.
Addressing institutional bottlenecks and improving economic governance is another crucial aspect of the plan. Minister Thang and Party General Secretary To Lam have emphasized the need for the finance sector to focus on thoroughly resolving institutional hurdles that limit development, enhancing decentralization, delegation of authority, and coordination of economic resources to create a more dynamic economic space.
Recognizing the private sector's large contribution to the economy, the Minister supports targets from the Politburo’s Resolution 68 for 2030. These include reaching 2 million enterprises, raising their contribution to 55-58% of GDP, increasing labor productivity by 8.5-9.5% annually, and integrating large private enterprises into global value chains. These are key to transforming the finance sector into a modern, industrialized sector aligned with global standards.
The finance sector is also expected to maintain its role as a leading and innovative force, actively supporting national economic renewal and development. Minister Thang engages in international dialogue and cooperation to boost financial integration and knowledge exchange, which are vital for modernization, as seen in meetings with high-level officials from other countries.
In addition, the sector will focus on promoting innovation, commitment, and a pioneering spirit. This is to ensure that it remains at the forefront of national economic renewal and development, as commended by top Party and government leaders.
The insurance sector in Vietnam now accounts for over 3% of the GDP, with about 11% of the population participating in life insurance and tens of millions in non-life insurance. The MOF has established and perfected the institutional, legal, and infrastructure framework for the sustainable development of insurance and securities markets.
The stock market in Vietnam currently has around 2,300 listed companies, with a market capitalisation of about 65% of GDP and a bond market size of about 32.8% of GDP. The finance sector has effectively managed state reserves, providing rice and essential goods to people affected by natural disasters and epidemics.
The target for 2025 is to achieve 8.3-8.5% growth, with GDP per capita reaching about $5,000, moving Vietnam into the group of upper-middle-income countries. The average economic growth rate in the 2021-2025 period is estimated to be about 6.3% annually, among the highest in the world.
Fiscal policy has played a critical supportive role during crises such as the pandemic, waiving, reducing, or deferring around VND1.1 quadrillion ($44 billion) in taxes, fees, and land use charges. The reforms have shifted the economy from a centrally planned mindset to an open, integrated, and socialist-oriented market economy.
The finance sector will also closely coordinate with ministries, sectors, and localities to effectively implement five key groups of tasks and solutions. These include expanding the finance sector, promoting the development of the stock and insurance markets, innovating social security policies, improving economic and financial institutions, and implementing socioeconomic development strategies.
In conclusion, Minister Nguyen Van Thang’s outlined tasks and solutions revolve around ambitious economic growth targets, removing institutional obstacles, empowering the private sector, fostering innovation and leadership in the finance sector, and enhancing international cooperation to support Vietnam's goal of becoming a modern finance industry and reaching upper-middle-income status by 2030.
Investing in modernization and innovation is key for the Vietnamese finance sector's growth and advancement towards upper-middle-income status as outlined by Minister Nguyen Van Thang. The sector's development is closely linked to the private sector as both aim to boost economic growth, and the finance sector plays a crucial role in supporting national economic renewal and development through business investments.
