10% crude oil price hike could trim Vietnam’s growth by 0.4%: finance minister

A 10% increase in crude oil prices could reduce Vietnam’s economic growth by about 0.4% and push inflation up by around 0.5%, Minister of Finance Ngo Van Tuan said on Tuesday.

“The price of a fiber optic cable has increased sixfold compared to the same period last year,” he noted at the first session of the 16th National Assembly.

Addressing lawmakers’ concerns during discussions on the 2026-2030 socio-economic development plan, particularly the goal of achieving double-digit growth, Tuan acknowledged that the target is highly challenging but unavoidable if Vietnam is to meet its long-term ambitions, including becoming a modern, industrialized nation by 2045.

He pointed out that since 1946, only 13 countries and territories have sustained double-digit growth for more than a decade to successfully transition from developing to developed status. In Vietnam’s 40 years of reform, growth has exceeded 9% only twice and has never reached double digits.

Citing positive indicators, Tuan said in the first quarter of 2026, the country’s GDP grew 7.83% year-on-year, exports rose more than 19%, and newly established businesses increased by over 31.7%. However, to reach annual growth of 10% or more, the remaining quarters would need to expand by 10-11%.

He warned of mounting challenges, noting that the economy is expected to feel stronger impacts from Middle East tensions starting in the second quarter.

To support the growth target, the minister outlined several key measures. First, growth scenarios must be reviewed and updated with clear targets assigned to ministries, localities, and businesses in line with evolving conditions.

Second, closer coordination between fiscal and monetary policies is essential to ensure adequate capital supply while maintaining macroeconomic stability, with fiscal policy playing a central role.

The Ministry of Finance will continue refining tax policies to ensure proper, sufficient, and timely revenue collection while fostering a more supportive environment for businesses, particularly small and medium-sized enterprises, which account for about 96% of all firms and contribute more than half of GDP.

On public investment, Tuan said the ministry is accelerating the implementation of tasks assigned by the Prime Minister, focusing on clearing bottlenecks for backlogged projects. These stalled projects, covering around 200,000 hectares of land and involving approximately VND3,300 trillion ($125.38 billion), equivalent to three times the planned public investment for 2026, represent both a major constraint and a significant potential growth driver.

Efforts will also target structural bottlenecks. The ministry plans to propose amendments to four major tax laws, namely the Personal Income Tax, the Corporate Income Tax, the Value-Added Tax, and the Excise Tax, to remove barriers and support business expansion.

Regarding capital markets, Tuan noted that Vietnam’s economy remains heavily reliant on short-term funding from the banking system, while long-term capital must increasingly come from bond and equity markets.

Total society's investment is expected to rise above the current 33.1% of GDP, with overall capital demand projected to grow 2.2 times. Central budget investment is set to increase 3.4 times, while foreign direct investment (FDI) is expected to rise by about 1.7 times.

To support this shift, comprehensive reforms across institutions, infrastructure, and market participants are needed, he said, adding developing professional investment institutions will provide safer channels for retail investors, while stronger coordination between financial intermediaries and regulators will help ensure transparency, efficiency, and market stability.