Vietnam’s growth push faces funding, labor and energy tests

Vietnam’s economy is expanding faster than most of its neighbors, helped by manufacturing, infrastructure spending and a rising consumer market, Fortune reported. The pace matters because Hanoi has set targets that would require the country to sustain unusually rapid growth for years.

According to Fortune, Vietnam’s economy grew 8% last year, compared with 5% in Malaysia, the next-fastest major economy in Southeast Asia cited in the report. Fortune put Vietnam’s GDP at $527 billion and said the country has passed Malaysia and the Philippines while narrowing the gap with Thailand.

The country’s benchmark VN-Index has risen more than 35% over the past 12 months, Fortune reported. FTSE Russell is set to move Vietnam to secondary emerging-market status in September, a change Fortune said could draw billions of dollars from passive investment funds.

Manufacturing boom brings limits

Vietnam has benefited from companies shifting some production out of China, Fortune reported. The magazine cited investments by Samsung, Apple and Nintendo in factories that make electronics and other goods for global markets.

Alberto Vettoretti, a senior ASEAN executive at Ascentium, told Fortune that foreign direct investment accounts for 80% of Vietnam’s exports. Michael Piro, co-CEO of Indochina Capital, told Fortune that much of the manufacturing surge involves foreign-owned companies doing foreign business, limiting how much wealth reaches Vietnamese households.

Fortune reported that many factories serving global brands are backed by Chinese capital. Piro told the magazine that about 70% of tenants in Indochina Capital’s industrial parks are mainland Chinese manufacturers, with Taiwanese companies accounting for another 20%.

Vietnam has also reached a trade arrangement with Washington after a period of tariff uncertainty, Fortune reported. The agreement set U.S. tariffs on Vietnamese goods at 20%, below the 46% rate threatened in April 2025, while goods judged to be transshipped from China face a 40% tariff, according to Fortune.

Government sets ambitious targets

Hanoi wants annual growth of 10% by 2030 and high-income status by 2045, Fortune reported. That would require per capita gross national income to rise from about $4,500 to $14,000, according to the magazine.

Fortune said the government is trying to strengthen the private sector through Resolution 68, which describes private business as the main force in the national economy. The measure calls for 2 million private enterprises by 2030 and 20 large private companies able to compete globally, Fortune reported.

The state is also backing large infrastructure projects. Fortune reported that Vietnam has approved a $67 billion high-speed rail line between Hanoi and Ho Chi Minh City and plans $25 billion in airport spending by 2030, including a replacement for the overloaded Tan Son Nhat International Airport.

Vinhomes CEO Nguyen Thu Hang told Fortune that sustaining high growth is the hard part. She said Vietnam needs development beyond Hanoi and Ho Chi Minh City, including better infrastructure across more regions.

Capital, workers and power pose risks

Outside forecasts are below Hanoi’s target. Fortune cited World Bank growth expectations of 6.8% for 2026, an OECD forecast of 6.2%, and projections of about 7% from the Asian Development Bank, the International Monetary Fund and the ASEAN+3 Macroeconomic Research Office.

HSBC forecasts 6.5% growth for 2026 and warned that downside risks are rising, Fortune reported. Inflation has reached 5.8%, above the central bank’s ceiling, according to the magazine.

Financing is a central challenge. Fortune reported that outside estimates put Vietnam’s infrastructure needs at $160 billion by 2030, while Techcombank CEO Jens Lottner estimated a $200 billion financing gap on top of $1.1 trillion in total investment needs.

Labor is tightening as construction and manufacturing expand, Fortune reported. The magazine said low-value manufacturing is already shifting to cheaper markets such as Cambodia and Bangladesh, while the United Nations projects that more than a quarter of Vietnam’s population will be over 60 by 2050.

Energy supply is another constraint. Fortune reported that Vietnam’s grid has faced outages, especially in the north, and that the country still depends heavily on fossil fuels while renewable projects take time to scale.

This story draws on original reporting from Fortune.