Vietnam aims to raise private sector contribution to 55% of GDP in 2025

Vietnam eyes to raise the private sector contribution to the GDP to 55% in 2025 and 60-65% in 2030, according to a new government resolution.

Per the goal of developing the private sector into a major economic driver under Resolution 45 released on Friday, the government plans to build at least 1.5 million businesses by 2025, including 60,000-70,000 large or medium ones.

Until 2030, the target is two million businesses, including strong ones capable of competing in both domestic and international markets.

Besides, labor productivity is targeted to grow 5% annually, while 35-40% of private firms engage in innovation.

The country also seeks to narrow the gap in technology, workforce, and competitiveness versus the ASEAN-4 group (Indonesia, Malaysia, Thailand, the Philippines); and have many private firms joining the global and regional supply chain.

The government has set key solutions for improving the business environment; enhancing the capabilities of the private sector and fair competition; developing infrastructure and private firms’ access to resources; aiding private businesses in innovation, modernization, and workforce development; and boosting state management.

In particular, it requested relevant ministries to facilitate household businesses to register as formal corporates; attract more investments into agriculture; empower the domestic market; and crack down on fraud, prevent market manipulation, ensure transparency, and handle abuse of monopoly.

According to the 2022 White Book on business released by the Ministry of Planning and Investment, Vietnam had 857,551 businesses as of end-2021, up 5.7% year-on-year. In 2022, Vietnam welcomed 208,368 firms, including 148,533 newly-registered ones and 59,835 resuming activities. Meanwhile, the country recorded 92,410 firms leaving the market last year, including 18,609 completing procedures to dissolve and 73,801 temporarily suspending activities.

In the first quarter of this year, 33,905 new businesses registered to enter the market with total registered capital of VND310.33 trillion ($13.21 billion) and 212,287 employees, down 2%, 34.1%, and 12.8% year-on-year, respectively, the General Statistics Office reported. Besides, 23,041 firms resumed operation. As a result, the market welcomed 56,946 new players in January-March, down 5.4% year-on-year.

Meanwhile, the country recorded 60,200 firms leaving the market in Q1, up 17.4% year-on-year. They included 42,900 businesses suspending their activities temporarily; 12,800 processing procedures to dissolve; and 4,600 completing procedures to dissolve.