As Vietnam continues to thrive among Asia’s top destinations for foreign investment, we are committed to keeping our global audience informed about key developments through the Kenno Vietnam Pulse series.
Vietnam closed August with strong momentum in public investment disbursement, new policies to expand credit growth, and a revised regulatory environment for the domestic gold market. The country also launched a series of construction projects nationwide, signed multiple partnership deals with South Korea, and continued to receive sci-tech R&D investments.
Public investments remain in focus
Public investment disbursement in Vietnam has picked up since early Q2/2025, supported by ongoing government initiatives and regulatory reforms. By August, total disbursement rose 86% YoY (vs. -11% in the first quarter and +35% in the first six months), reaching 44% of the annual target set by the Prime Minister. We expect this momentum to continue strengthening the economy and gradually boosting domestic consumption.
Credit quotas raised to support growth
Systemwide credit growth approached nearly 10% by end of July, compared with the 16% full-year target. Banks that have utilized 80% of their quota are now eligible for an automatic top-up of up to 2.5%. In our opinion, this trend stems from the directive by Prime Minister Pham Minh Chinh to phase out the quota mechanism by 2026 and provides banks with greater flexibility to achieve the State Bank's credit growth target in 2025. On a broader view, the push to expand credit reflects Vietnam’s pursuit of its ambitious GDP growth goal which was revised to 8.3-8.5% for 2025.
Photo: Vietnam Government Portal
To mark its 80th National Day anniversary (September 2), Vietnam simultaneously inaugurated and began construction on 250 projects worth nearly USD 49 billion across the country. The developments cover transport, housing, industrial, agricultural, education, healthcare, and technical infrastructure.
This gives us a positive outlook on Vietnam’s business and investment environment in the medium to long term. Since its administrative restructuring last year, the country has seen its public budget allocated more effectively to essential infrastructure, supporting both economic growth and improvements in living standards.
Photo: KoreaTimes
During General Secretary To Lam’s state visit to Seoul in August, Vietnam and South Korea have agreed to deepen their comprehensive strategic partnership across multiple areas. Approximately 50 agreements were signed in technology, energy, finance, culture, and education. A bilateral trade target of USD 150 billion by 2030 was announced, along with Vietnam’s call for more Korean enterprises to invest in the country as a production and R&D hub.
We believe the renewed commitment will also create additional tailwinds for sectors such as manufacturing, high-tech industries, and services, while reinforcing ties that have proven mutually beneficial for both countries. Also, broadening the relationship with South Korea anchors Vietnam more firmly in Asia’s growth, where economic drivers including infrastructure, digitalization, and tourism are increasingly shaped by regional partnerships.
Photo: Vietnam Investment Review
German software company SAP, during the opening ceremony of its innovation hub SAP Labs in Vietnam, announced plans to invest EUR 150 million (USD 175 million) into its new facility and local operations over the next five years. This makes Vietnam SAP Labs’ second destination in Southeast Asia after Singapore, and its 20th worldwide.
The launch event was attended by Vietnam's Deputy Prime Minister Nguyen Chi Dung, who highlighted the center’s significance for the country’s sci-tech talent development and digital transformation scene. In the same light, we at Kenno view medium- to long-term R&D investments from leading tech enterprises like SAP as further evidence of Vietnam’s increasingly competitive role in the global value chain.
In August, the government issued a decree revoking the State Bank of Vietnam (SBV)’s monopoly on gold bar production, allowing qualified private firms and commercial banks to apply for licenses. Currently, due to strict requirements, only a few large Vietnamese jewelers are eligible, including our portfolio company PNJ.
For jewelry producers like PNJ, we expect gold supply constraints to ease, supporting both manufacturing and retail growth. For the broader market, this signifies a fairer and more efficient environment, stimulating consumer demand and investor confidence. The new law is also expected reduce the gap between Vietnam’s and international gold prices.
And that’s a wrap for this month’s edition of Kenno Vietnam Pulse. We hope you enjoyed reading and found valuable insights into Vietnam’s market landscape. Feel free to subscribe to our monthly newsletter more timely, factual, and actionable updates. If you would like closer look at investment opportunities in Vietnam, we invite you connect with us for more information and tailored advice.