Strategic Public Investment Surge to Power Vietnam’s Growth Engine in 2025–2026

Economic

Summary:

Vietnam’s government is accelerating the disbursement of over VND 400 trillion in public investment during the final two months of 2025, aiming to catalyze private sector momentum...

Government Capital Injection to Spur a Multi-Sectoral Economic Rebound

In the closing stretch of 2025, Vietnam is preparing a decisive deployment of over VND 400 trillion in public investment to reignite economic momentum. According to data from the Ministry of Finance, as of October 23, 2025, only VND 464.8 trillion or 51.7% of the year’s total capital plan had been disbursed. This indicates that nearly half of the planned investment remains untapped, presenting a substantial opportunity for late-year economic acceleration.

At the Ministry of Construction, disbursement progress stands at roughly 51%, equivalent to just over VND 40.9 trillion. In response, Minister Trần Hồng Minh has instructed project owners to expand professional staffing, streamline administrative bottlenecks, and treat fund deployment not as a bureaucratic procedure but as a national priority.

This urgency is underscored by a government mandate for five major expressway segments including Biên Hòa–Vũng Tàu and Cần Thơ–Hậu Giang to be operational by December 19, 2025. In tandem, seven strategic projects, such as the Lào Cai–Hà Nội–Hải Phòng railway and the Thần Vũ and Núi Vung tunnels, are compelled to commence before year-end despite earlier delays. The Vietnam Securities Company MBS has flagged the time constraint as significant, noting that with only two months left, the remaining VND 400 trillion creates immense pressure to disburse efficiently and effectively.

Public Investment as a Catalyst for Private Capital and FDI Inflows

Beyond short-term stimulus, the public investment wave is expected to have broader structural effects. Analysts emphasize that public spending will serve as foundational capital, enticing both private sector investment and foreign direct investment into alignment. As major infrastructure projects transition from feasibility studies into preparatory phases such as the North-South High-Speed Railway and the Lào Cai–Hà Nội–Hải Phòng corridor the role of the government becomes central to shaping economic direction.

According to Bùi Nguyên Khoa, Deputy Director of BSC Research, the decentralization and empowerment in project management have accelerated decision-making, allowing greater local flexibility and responsiveness. These governance reforms enable faster implementation of large-scale infrastructure, which is critical for fostering inclusive national development.

The government’s objective is to finalize 3,000 kilometers of expressways and more than 1,000 kilometers of coastal roads in 2025. Dr. Nguyễn Tú Anh of VinUni argues that public investment no longer merely stimulates demand it acts as a structural anchor around which other capital flows orbit. When macroeconomic stability is coupled with consistent FDI inflows, infrastructure becomes a central node in a multi-tiered growth model. He further suggests that capital demands from infrastructure could prompt a resurgence in bank liquidity and credit expansion.

Infrastructure-Led Growth Triggers Sectoral Chain Reactions

A sharp rise in Q4 disbursements is anticipated to ignite rapid growth in construction-related industries. Firms engaged in infrastructure such as HHV, FCN, VCG, and C4G are projected to benefit from increased workloads and fund allocations. At the same time, building material companies like HPG, HSG, PLC, and KSB are expected to witness dual gains: rising demand from new projects alongside relatively stable input costs.

While the banking sector may not see immediate volume spikes, analysts point to its indirect gains. As public capital circulates back into the banking system, liquidity tightness may ease, thereby facilitating a stronger credit cycle into year-end.

However, not all real estate sectors are poised for recovery. While improved infrastructure raises expectations for housing demand, analysts caution that growth will likely concentrate in segments tied closely to urban centers, transit corridors, and integrated industrial-urban zones. Peripheral land, speculative plots, and stalled tourism projects are less likely to benefit.

Trade, FDI, and Consumption Gain Renewed Momentum

Vietnam's global trade outlook also appears resilient. Agriseco forecasts a 17% increase in international trade in 2025 despite global protectionist pressures. This reflects Vietnam’s embeddedness in global supply chains, where total import-export turnover could reach a record USD 900 billion.

FDI inflows are expected to remain strong following Vietnam’s reciprocal tax agreements with the United States, which pave the way for high-quality capital from Western investors. Targeted investment is likely to favor industrial parks, logistics, and export-oriented manufacturing sectors with long-term structural value.

Concurrently, recovering consumer demand is bolstering essential retail chains and sectors such as food and beverage, electronics, and household goods. With input costs declining, retailers are positioned to enjoy improved profit margins. Tourism, too, is rebounding as visitor volumes climb, supporting airlines, hospitality, and travel services.

Macroeconomic Pressures May Complicate Outlook

Despite this optimistic trajectory, risks remain. A weakening Vietnamese đồng against major currencies, coupled with rising gold prices and inflationary pressures, could constrain monetary policy flexibility. This, in turn, may affect both credit expansion and the stock market’s ability to attract fresh capital.

If inflation expectations rise too sharply, the State Bank of Vietnam may be forced to reconsider accommodative stances, potentially blunting the momentum gained from public investment. Moreover, volatile commodity markets and exchange rate fluctuations could erode investor confidence if not properly managed.

A Delicate Balance Between Momentum and Caution

Vietnam’s late-2025 public investment surge signals a strong political will to revive growth. The government’s strategic use of public funds as leverage to activate private and foreign capital presents a promising path for sustained recovery. However, success will hinge not only on rapid disbursement but also on maintaining macroeconomic stability, controlling inflation, and ensuring that the investment flows into productive, high-impact sectors.

As 2025 transitions into 2026, the Vietnamese economy finds itself at a crossroads: with policy clarity, infrastructure execution, and capital synergy, it could accelerate into a new growth phase. Without such alignment, however, the risk of inefficient allocation and monetary tightening could dilute the intended stimulus.

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Gerik

Economic

Commodity

Fed Rate Cut Spurs Metal Rally

The Federal Reserve's decision to lower interest rates for the third consecutive meeting acted as a catalyst for the industrial metals rally. With rates reduced and the Fed’s tone hinting at caution toward future cuts, markets interpreted the move as a boost for growth-sensitive commodities. The central bank also raised its US GDP growth forecast for 2026 to 2.3%, up from 1.8%, while expecting inflation to ease to 2.4%. This dual outlook of solid growth and cooling inflation is particularly supportive for industrial demand.

Copper surged as much as 2.1% to reach $11,800.50 per ton, surpassing Monday’s record, and was still trading at $11,765 as of 2:29 p.m. on the London Metal Exchange. The metal has now gained nearly 35% year-to-date, driven not only by monetary easing but also by global supply concerns. Mine disruptions and stockpiling in the US due to expected tariffs in 2026 have amplified fears of an international shortage. At the same time, long-term demand remains underpinned by the ongoing expansion of renewable energy and electrification projects, sectors that rely heavily on copper.

China’s Mixed Influence

While Chinese copper consumption had declined in recent months, optimism has begun to return following Beijing's pledge to maintain a “proactive” fiscal policy and a “moderately loose” monetary approach. These policy signals suggest that domestic demand support is forthcoming, although the pace and scale of such recovery remain uncertain.

The bullish sentiment extended beyond copper. Tin jumped 3.8% to a three-year high of over $41,500 per ton, while zinc rose 3%. The only major metal not participating in the rally was nickel, which remained under pressure. Lower interest rates generally enhance the attractiveness of non-yielding commodities like metals, and they reduce borrowing costs for capital-intensive sectors like construction, infrastructure, and manufacturing.

Copper’s historic breakout reflects a convergence of monetary stimulus, strong US economic projections, and persistent supply bottlenecks. While short-term volatility remains especially with China’s recovery still uncertain the medium-to-long term fundamentals for copper appear robust, particularly amid the ongoing energy transition. Further upward pressure on prices could emerge if Chinese demand rebounds more forcefully or if geopolitical or trade tensions escalate supply risks.

Source: Reuters

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Adam

Economic

The government's tariff revenues in November ticked down for the first time since President Trump began implementing his historic duties, according to new totals from the US Treasury Department.

The agency's monthly statement for November, released on Wednesday, saw a reading of $30.76 billion in customs duties collected, following an October reading of $31.35 billion.

The revenue decline came after Trump added no significant new duties last month and backtracked on some of his existing tariffs on grocery store items.

On Nov. 14, the White House released an executive order that excluded items such as coffee, tea, beef, bananas, tropical fruit, and cocoa from duties as part of an effort to address Americans' affordability concerns.

The downward tick in tariff revenue breaks a streak that began earlier this year when Trump began rolling out his tariff regime, leading to skyrocketing monthly revenues each month, from $7.25 billion collected in February until October's reading, which was over four times as large.

Trump's first major tariff move of his second term was implementing new tariffs on goods from Mexico, Canada, and China, announced in February and fully taking effect in March.

The step down in revenue isn't wholly unexpected and comes after the Congressional Budget Office recently slashed its estimate of tariff receipts expected for the decade ahead by $1 trillion.

Wednesday's release brings the total revenue collected for this calendar year to about $236.16 billion, with one month to go. The November reading also remained well above the tariffs collected one year prior, which totaled $6.71 billion in November 2024.

In an interview with Politico this week, Trump defended his tariff regime, but when asked whether he'd consider cutting tariffs on additional consumer staples, he suggested that he might allow for "some" additional carveouts, similar to those made last month.

Wednesday's new Treasury Department report also showed the minimal dent tariffs are making in the yawning government deficit, with that data showing an overall $173 billion government shortfall in November, more than five times the tariff revenue number.

Trump, meanwhile, has continued to tout tariff revenues at nearly every opportunity. He has both exaggerated the amount coming in and promised the money for multiple projects, from possible $2,000 tariff dividend checks to paying down the national debt to perhaps even replacing federal income taxes.

Just this week, the president announced plans for a $12 billion bailout to farmers who have been pummeled by his trade fights and said that the money "would not be possible without tariffs."

Wednesday's release could further stretch the already difficult math that economists often say would be unlikely to cover nearly any of Trump's ideas, much less all of them.

As just one example, the Committee for a Responsible Federal Budget recently estimated that one round of tariff dividend checks would cost $600 billion and take about two years to pay off using only tariff revenues.

The tariff revenue question remains even further in flux as the Supreme Court considers a suit that concerns whether a 1977 law called the International Emergency Economic Powers Act (IEEPA) empowers the president to impose tariffs.

A ruling against the Trump administration could invalidate over half of Trump's tariffs, by revenue, and potentially even force the president to issue refunds.

Source: finance.yahoo

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James Whitman

Political

President Donald Trump spoke with Prime Minister Narendra Modi as negotiators from the US and India work to resolve differences over an elusive trade agreement.

Modi on Thursday described the conversation as "warm and engaging" and said they "reviewed the progress in our bilateral relations and discussed regional and international developments."

"India and the U.S. will continue to work together for global peace, stability and prosperity," Modi posted on X.

An Indian official added that the two leaders underlined the importance of sustaining momentum in bilateral trade talks, and also discussed cooperation in critical technologies, defense, and security.

The White House did not immediately respond to a request for comment.

A pair of American delegations traveled to New Delhi this week in an effort to repair ties between the two countries that were damaged amid Trump's tariff push.

State Department official Allison Hooker was scheduled to meet with Indian diplomats including Foreign Secretary Vikram Misri. Separately, Deputy US Trade Representative Rick Switzer has been discussing a tariff framework with Indian negotiators.

The engagement has raised hopes of a rapprochement, especially around trade. Trump's punitive 50% tariffs have battered Indian industries and New Delhi is eager to secure relief and negotiations over the rate have dragged on for months. Indian officials have recently expressed optimism that an initial agreement to lower import taxes could be clinched by year's end, after the two sides failed to reach an understanding in the fall.

India's top economic adviser, V. Anantha Nageswaran, said in a Bloomberg Television interview that he would be surprised if a trade deal wasn't signed by March, saying most trade-related issues have been resolved.

"I was hoping something would be done by the end of November, but it has turned out to be elusive," Nageswaran said. "That's why it is difficult to give a timeline on this. However, I would be surprised if we don't have it sealed by the end of the financial year."

Trump has repeatedly signaled that he would lower the sky-high tariffs he imposed on Indian goods, which he enacted partially as a response to the country's purchases of Russian oil. But he has continued to send mixed messages about his views on India's trade practices.

Earlier this week, Trump suggested he might impose new tariffs on Indian rice to address alleged dumping. India is the world's largest rice exporter and the second-largest source of imports for the US. The Indian Rice Exporters Federation said in response that exports to the US remain demand-led, with major American producers not growing a similar crop to Indian basmati.

Source: Bloomberg

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Gerik

Economic

Bitcoin Below $90K Amid AI-Induced Risk Aversion

Bitcoin fell 2.5% to $90,056.24, breaking below the psychological $90,000 mark as market sentiment soured following disappointing AI-related earnings from Oracle. Investors were rattled by signs that soaring infrastructure spending in the AI sector hasn’t yet translated into profits, dampening broader appetite for risk assets. Ether also dropped 4.3% to $3,196.62.

The pullback came despite otherwise resilient equity markets, highlighting a growing divergence between crypto and traditional risk assets. Analysts noted that crypto markets are still digesting the October 10 selloff and remain hesitant. Standard Chartered, adjusting to new macro conditions, slashed its 2025 year-end Bitcoin forecast from $200,000 to $100,000, citing a likely end to corporate treasury buying and emphasizing that future growth will now depend mainly on ETF inflows.

Economic Surprise: U.S. Trade Deficit Narrows Sharply

Contrary to expectations of a widening gap, the U.S. trade deficit shrank by 10.9% in September to $52.8 billion its smallest level since June 2020. This significant drop, well below the forecasted $63.3 billion, was driven by a 3% jump in exports (to $289.3 billion), particularly a 4.9% surge in goods exports to a record $187.6 billion. Imports rose only 0.6%.

This suggests trade may have added to Q3 GDP growth. Before the release, the Atlanta Fed projected Q3 GDP at 3.5%. The U.S. government will publish the official estimate on December 23. This narrowing comes despite trade volatility caused by President Trump’s continued protectionist policies and tariff-driven distortions.

Labor Market: Jobless Claims Surge, But Analysts Warn Not to Panic

Initial jobless claims jumped by 44,000 to 236,000 in the week ended Dec. 6 the biggest weekly increase since March 2020. However, economists caution this figure may be skewed by holiday volatility. The previous week had seen the lowest claims in three years due to Thanksgiving-related timing.

Unadjusted claims rose nearly 115,000, with increases concentrated in California, Texas, Illinois, and New York. Despite this spike, the four-week moving average a more stable indicator rose only modestly to 216,750, still within the historical norms of a stable labor market.

Some analysts, like Pantheon Macroeconomics, interpret the rise as a sign of increasing layoffs, while others, such as High Frequency Economics, see it as seasonal noise. Major employers like PepsiCo and HP have recently announced job cuts, contributing to broader concerns about labor market softening. However, Navy Federal’s chief economist advises caution: “Smoothing it out, this still looks like an economy averaging 215,000 to 220,000 new jobless claims a week. That’s not a cause for concern.”

Market Sentiment: Risk Off Prevails Despite Mixed Signals

The disconnect between crypto and equities, the labor market's erratic signals, and narrowing trade deficit data reflect a complex macroeconomic picture. While Fed Chair Jerome Powell described the labor market as “gradually cooling” and highlighted downside risks in job creation, the central bank did not revise its unemployment forecasts for 2026.

With crypto sentiment fragile, AI profits uncertain, and recession fears still lingering under the surface of stronger trade numbers, investors are navigating choppy waters heading into 2026.

Remain cautious with crypto. If Bitcoin fails to recover above $92,000 in the near term, it may test stronger support around $86,500–$87,000. On the macro side, a narrower trade deficit and resilient consumer demand may support the USD, especially if labor market fears are overblown.

Source: Reuters

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Adam

Economic

There is a growing divergence of views among FOMC members. Some remain dovish, favoring more rate cuts. Their argument is based on a belief that inflation will continue to move toward the 2% target and that the weakening labor market benefits from lower interest rates. On the other side of the aisle are hawkish views.

Unlike the doves, they are concerned that inflation could become entrenched at 3% or higher. They do not view the recent weakness in the labor market as overly concerning. The divergent opinions can result in mixed messages from the Fed. As a result, the market was expecting a “hawkish easing.” Was the tone of yesterday’s meeting hawkish, less dovish, or even more dovish?

As we share below, the Fed made very few edits to the prior statement. Given so little has changed, it’s hard to say the Fed has become hawkish. Moreover, as we circle below on the left side, the Fed will begin purchasing Treasury Bills to expand its balance sheet by $40 billion a month and provide the markets with liquidity.

Despite what they may or may not call it, it’s QE. QE is dovish. Given that they stopped QT on December 1 and restarted QE, we would have to characterize the statement as more dovish. Yesterday’s policy change was undoubtedly not a hawkish cut as many expected.

During the press conference, Chairman Powell alluded to the labor market continuing to weaken and his belief that excess inflation is mainly due to tariffs. In fact, he claims inflation would be near 2% if not for the temporary impact of tariffs. His message appears slightly more dovish than at the previous meeting.

Based on the statement, QE, the press conference, and the Summary of Economic Projections (SEP) discussed below, we characterize the Fed’s policy stance as more dovish. It’s worth noting that there were three dissenting votes: one in favor of cutting by 50 bps and two hawkish votes in favor of keeping rates unchanged.

Fed’s Summary Of Economic Projections (SEP)

On a quarterly basis, the FOMC polls its members for forecasts on where GDP, unemployment, inflation, and the Fed Funds rate will be at the end of the current year, as well as the following three years and the “longer run.” The SEP is also referred to as the Fed dot plots, as each member’s projection is plotted on a scatter plot, as we share in the second graphic.

Of note:

The forecast for GDP growth next year rose sharply from 1.8% to 2.3%

PCE and Core PCE inflation were lowered by one and two-tenths, respectively, for 2026.

The Fed thinks inflation will fall back to its 2% target by 2027.

They forecast that unemployment has potentially peaked at 4.5% and will inch down over the next year.

Fed members are only expecting to cut rates once next year on average. However, the range of expectations is extensive, ranging from 2.1% to 3.9%.

Longer-run GDP forecasts have remained at 1.8% for quite a while despite AI and the massive data center expansion. The Fed must not think that AI and productivity gains will benefit the economy.

Source: investing

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Gerik

Economic

Exports Surge While Imports Stay Flat, Boosting Trade Balance

In a surprise development, the U.S. trade deficit narrowed significantly in September, defying forecasts of an increase. The monthly gap in goods and services fell to $52.8 billion, compared to $59.3 billion in August, marking a five-year low. Economists surveyed by Reuters had predicted a widening to $63.3 billion, making the actual data a major upside surprise.

This improvement was driven by a robust 3.0% rise in total exports, which climbed to $289.3 billion. Within that, goods exports jumped by 4.9% to $187.6 billion a gain propelled by record-breaking shipments of consumer goods. On the import side, growth was subdued at 0.6%, reaching $342.1 billion, as demand for foreign automobiles and parts weakened. Notably, imports of vehicles, parts, and engines dropped to their lowest level since November 2022, signaling possible supply-side adjustments or waning domestic demand in that segment.

The goods trade deficit narrowed to $79.0 billion, its smallest reading since September 2020, reinforcing the overall improvement in the U.S. external balance.

Trade Rebounds from Earlier GDP Drag

Earlier in the year, trade was a drag on economic growth. In the first quarter of 2025, net exports subtracted a record 4.68 percentage points from GDP due to volatile trade flows driven by tariffs and geopolitical frictions. However, this trend reversed in the second quarter, with trade contributing positively, and the September data now suggests that trend likely continued into the third quarter.

Prior to this trade release, the Atlanta Federal Reserve projected Q3 GDP growth at an annualized 3.5%. With the sharp contraction in the trade deficit, this estimate may be revised upward, especially if October data confirms ongoing strength in exports. The first official estimate of Q3 GDP will be released on December 23, following delays caused by a 43-day government shutdown.

Protectionist Trade Policies Continue to Skew Economic Signals

President Donald Trump’s tariff-heavy trade strategy has continued to inject volatility into U.S. trade statistics. While tariffs initially led to reduced imports, they also created supply chain distortions, retaliatory duties, and shifted trading patterns all of which have at times muddied the underlying health of the trade balance.

September’s narrowing trade gap may reflect both short-term gains from U.S. export competitiveness and strategic shifts by exporters to exploit tariff-exempt windows or rerouted global demand. However, the sustainability of such surpluses remains uncertain, particularly if global demand slows or retaliation intensifies.

A Strong Trade Report Adds Momentum to Q3 Growth

The unexpected contraction of the U.S. trade deficit in September marks a rare piece of good news for policymakers and investors alike. With consumer goods exports hitting record highs and automotive imports declining, the trade sector provided a clear lift to the economy in Q3.

While part of this shift may be transitory or policy-driven, it underscores the positive correlation between trade balance improvements and headline GDP growth. Whether this trend continues into 2026 will depend on evolving trade relations, global demand, and domestic manufacturing competitiveness. For now, the September data provides an encouraging sign of resilience in U.S. external trade performance.