Kenno Vietnam Pulse | February 2025
As Vietnam continues to thrive among Asia’s top destinations for foreign investment, we remain committed to keeping our global audience informed about key developments through the Kenno Vietnam Pulse series.
In February, Vietnam saw positive developments across multiple sectors, including a strong rebound in tourism, a new railway line, a new foreign investment strategy in telecommunications, and expanding foreign investment in high-tech industries. The country also implemented economic strategies and explored potential administrative reforms aimed at sustaining long-term growth.
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Macroeconomic Highlights
Strong Rebound in International Tourism
Vietnam’s tourism sector saw a robust recovery in early 2025, as 2.1 million international tourists visited the country in January, marking a 37% year-on-year (YoY) increase. This growth is primarily driven by the resurgence of Chinese tourists, a key source market. In 2024, Vietnam welcomed 17.6 million international visitors, reaching 98% of pre-pandemic levels (18 million in 2019). Korean tourists led the arrivals, accounting for 26% of total visitors, followed by China (21%), Taiwan (7%), and the United States (4.4%).
Vietnam continues to attract foreign travelers with its rich natural landscapes, cultural diversity, renowned cuisine, hospitality, and affordability. Additionally, relaxed visa policies and a wide range of travel experiences further boost the country’s appeal. The rising number of international visitors is expected to drive domestic consumption and contribute significantly to economic growth. The Vietnamese government has set a 2025 target of 22–23 million international tourists, which we believe is an achievable goal that could see tourism contributing 8–9% of GDP this year.
Government Measures to Support 8% GDP Growth Target
To achieve its GDP growth target of 8% in 2025, the Vietnamese government has rolled out a strategic plan that assigns specific Gross Regional Domestic Product (GRDP) growth targets across all 63 provinces. Notably, high-growth industrial hubs such as Bac Giang (13.6%), Hai Phong (12.5%), and Quang Ninh (12%) are expected to lead the country’s economic expansion. Meanwhile, major urban centers like Ho Chi Minh City (8.5%) and Hanoi (8%) are projected to maintain steady growth rates.
In addition, the government has approved policies accommodating higher inflation, increased credit growth, and a larger public debt-to-GDP ratio to sustain economic momentum. The State Bank of Vietnam has also directed commercial banks to maintain lending interest rates at their current low levels, with potential further reductions to stimulate business activity.
$8.4 Billion Approved to Develop Interprovincial Railway Project
Vietnam’s National Assembly has approved an investment policy for the Lao Cai – Hanoi – Hai Phong railway project, with an estimated budget of USD 8.4 billion and expected full completion by 2030.
The new railway system, spanning 391 km on the main route and 28 km on branch lines, will pass through nine provinces in northern Vietnam. It is forecast to contribute approximately 0.2 percentage points to annual GDP growth between 2025 and 2030. We see this development as a positive sign for continuous investment in public infrastructure and economic connectivity.
Samsung Expands into High-Tech Sectors in Vietnam
Samsung has recently announced plans to expand its operations into new business areas in Vietnam, including AI, semiconductors, and digital transformation. The electronics giant is Vietnam’s largest FDI contributor, with USD 23.2 billion invested across the country.
According to Prime Minister Pham Minh Chinh, during a recent meeting with Samsung Vietnam’s General Director Choi Joo Ho, Vietnam is committed to supporting investors by facilitating more favorable policies and business environments. He also suggested that Samsung establish training centers at the National Innovation Center, increase its investment in Vietnam, and support startup and innovation activities.
We believe this expansion significantly contributes to Vietnam’s strategy to establish a prominent role in the global supply chain for high-tech R&D and manufacturing. The growth of this sector is expected to enhance workforce capabilities and attract further FDI into the country.
Vietnam Welcomes Foreign Investment in Satellite Internet Services
Vietnam has launched a pilot program allowing foreign investment in low Earth orbit (LEO) satellite internet services, without restrictions on ownership percentages or capital contributions. This opens doors to global investors like SpaceX, which has shown interest in bringing its Starlink program to Vietnam.
This initiative is part of a new government resolution mandating the development of robust telecommunications and internet infrastructure. Globally, there are approximately 20 major corporations, mainly in the U.S. and China, developing LEO satellite constellations for internet services.
We view this as a major advancement for the telecommunications industry, as many other sectors stand to benefit from modern satellite data transmission systems offering high-speed, high-coverage internet access, especially in underserved areas of Vietnam.
Vietnam Considers Merging Provinces for Administrative Efficiency
The Vietnamese government is reportedly exploring a plan to merge certain localities, reducing the total number from 63 to around 40. This restructuring aims to enhance administrative efficiency, improve governance transparency, and ensure clearer delegation of state management responsibilities.
One of the issues raised during a National Assembly session was that too many provinces might lead to unnecessary bureaucracy and inefficient resource allocation. To optimize governance, the Assembly discussed the potential merging of certain provinces and classifying them based on several criteria, such as industrial provinces, agricultural provinces, coastal economic zones, and urban service hubs.
At Kenno, we’re excited to see various economic and legislative reforms in Vietnam over the past year, undertaken by the new leadership. These initiatives help accelerate economic growth and foster transparency in Vietnam’s business and investment landscape. This specific proposal, if approved, could be beneficial for the country’s administrative system and public spending in the long term.
Stay in the know!
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 via our website for timely, factual, and actionable updates directly in your inbox each month.
Should you need a closer look at investment opportunities in Vietnam, we invite you to connect with us for more information and tailored advice. Simply send us a DM on LinkedIn or reach out via [email protected].
Disclaimer:
This document is prepared by Kenno Asset Management Pte. Ltd. ("Kenno"), the investment advisor for the Asia Top Picks Fund which is open only to professional investors. This marketing communication does not constitute investment advice. Please refer to Kenno’s official fund documents before making any final investment decision.
The information provided in this document is accurate as of the time of writing. Kenno does not guarantee the ongoing accuracy or completeness of this information and is not responsible for updates or changes after publication.