Vietnam infrastructure spending surges 40%
Vietnam’s infrastructure spending surged 40% year-on-year in the first half of the year, fuelled by fast-tracked approvals of projects amid provincial mergers; legal reforms granting provinces more decision-making authority over project approvals; and the streamlining of disbursement processes, write chief economist Michael Kokalari and senior analyst Thai Viet Trinh at VinaCapital.

Surging infrastructure disbursement in H1/2025. Source: Ministry of Finance, VinaCapital.
Vietnam is embarking on sweeping reforms across both the public and private sectors that some are calling “Doi moi 2.0.” (Reform 2.0).
These initiatives aim to boost the country’s GDP growth potential by increasing the (already highly significant) role of the private sector in the economy, streamlining the Government’s own operations, and addressing other sources of inefficiency in the economy.
The first signs that these reforms are working are already emerging: there has been an impressive 40% surge in infrastructure spending in H1, according to the Ministry of Finance, which in turn reflects progress on streamlining the approval processes that impeded spending in recent years.
Vietnam’s infrastructure spending actually declined in 2024, as can be seen in the chart below, despite a dire need for increased investment in this rapidly industrializing country. The Q2 spending rise that can also be seen below was driven both by a heightened sense of urgency across Government agencies and newly expanded authority for local governments to fast-track and execute major projects.
Specifically, spending is increasing at the local level, where disbursement is up by more than 40% year-on-year. Several provinces in Vietnam are undergoing mergers as part of the broader, sweeping reforms across both the public sector and the private sector.
Provincial mergers, plus other internal Government initiatives, have promoted a sense of urgency among both local and central Government officials, which is one factor prompting local authorities to fast-track project approvals – especially those that are “shovel ready,” such as expanding existing roads/highways.
In addition to increased urgency, recent legal reforms are essentially delegating a lot more authority in public projects to the local level. The National Assembly recently approved a series of measures that enable local authorities to approve major projects (e.g., airports and urban area developments larger than 50 ha) that previously required Prime Minister-level approval.
In addition, the approvals process for local and national public projects is being streamlined and the Government is actively encouraging more Public-Private Partnerships (PPP), including both a resumption of build-transfer (BT) projects, which had been stalled for the last few years, and a potential widening of the definition of PPP projects to well beyond roads, bridges, and tunnels to potentially include data centers and other components of “high tech infrastructure.”
For example, the merger of 63 province-level treasury offices into 20 regional offices cut the number of required interactions between contractors and state treasuries by about half and contractors are now able to submit documents online to regional State Treasury offices. The net result is a dramatic drop in the time it takes for financial disbursements to reach contractors – to just 1-3 days – much faster than the previous process, which required multiple in-person interactions and an abundant amount of manual paperwork.
In short, the confluence of provincial mergers, regulatory relaxation, and an overall heighted focus on economic growth in the Government is helping to drive this increase in infrastructure spending, which is seen as a key driver of GDP growth.
Finally, progress on larger scale national projects is also accelerating, and the completion timelines on several major projects such as the $13 billion Long Thanh International Airport, $13 billion Hanoi and HCMC ring roads, and $8.4 billion Lao Cai-Hanoi-Haiphong railway has been shortened by as much as three years.
Legal framework updates
Vietnam’s Government is working on modifying several laws related to infrastructure investments with the aim of increasing private sector involvement in projects that are aligned with national infrastructure objectives and to further streamline the disbursement of public funds. Some key legal developments are listed in the table below.

Vietnam is well-positioned to sustain its strong momentum in disbursements of infrastructure investments; Government debt is below 40% of GDP, the budget surplus was over 5%/GDP in the first five months of 2025, and it has over $45 billion in undisbursed funds earmarked for infrastructure spending. The primary impediment to faster infrastructure disbursement in the past has been legal and regulatory bottlenecks, which the measures listed above will help alleviate.
Beneficiaries of infrastructure spending
Despite higher infrastructure investment in Vietnam, investment options in listed infrastructure-related stocks in Vietnam remain somewhat limited, although some “second derivative” stock plays such as construction materials firms can give investors good indirect exposure to the nascent boom.
Many of the key contractors and materials suppliers that are benefiting from increased infrastructure investments in Vietnam are private firms, such as Son Hai and Truong Son; some of the publicly listed infrastructure firms suffer from unsophisticated corporate governance or financial management.
That said, certain firms like Vietnam’s leading steel producer Hoa Phat Group (HPG) have good corporate governance, stronger management teams, and healthier cash flows. HPG has substantial production capacity, its growth is closely linked to Vietnam's infrastructure development, and the company is expanding its capabilities into producing the steel required to build high-speed railway rails, given the Vietnamese Government’s Resolution 172. The table below highlights various listed infrastructure companies categorized by the sub-segments of infrastructure development that they specialize in.

Conclusion
Vietnam’s infrastructure spending surged 40% year-on-year in H1/2025 fuelled by: 1) fast-tracked approvals of projects amid provincial mergers; 2) legal reforms granting provinces more decision-making authority over project approvals; and 3) the streamlining of disbursement processes.
Going forward, the Government is revamping many investment laws to boost private investment, relaxing PPP and BOT conditions, increasing state contributions and expanding eligible project types.
- Read More
Phu Quoc enters Travel + Leisure’s top luxury destinations
Phu Quoc’s presence in Travel + Leisure’s Asia-Pacific luxury travel rankings continues to affirm the island’s status as a world-class destination.
Companies - Thu, July 10, 2025 | 11:43 am GMT+7
July dividend wave hits Vietnamese market following AGM season
Ending the 2025 AGM season, a series of Vietnamese companies have announced dates for finalizing the list of shareholders eligible for dividends in July.
Finance - Thu, July 10, 2025 | 11:07 am GMT+7
Cordless technology leader TTI plans to expand manufacturing in southern Vietnam
Germany's Techtronic Industries Company Limited (TTI), a world leader in power tools and outdoor power equipment, wants to expand its Milwaukee plant in Ho Chi Minh City.
Industries - Thu, July 10, 2025 | 8:58 am GMT+7
Vietnam pledges support for AES investment in green energy
Vietnam will continue to facilitate foreign investment and business activities, including those by U.S. enterprises, in line with laws and the country’s evolving development needs, said Tran Luu Quang, Chairman of the Party Central Committee’s Commission for Policies and Strategies.
Companies - Wed, July 9, 2025 | 11:10 pm GMT+7
Tezuka Daisuke appointed as new general director of Aeon Vietnam
Aeon Group has appointed Tezuka Daisuke, who is in charge of its organization reform for fiscal year 2025, as general director of Aeon Vietnam Co., Ltd.
Companies - Wed, July 9, 2025 | 11:03 pm GMT+7
Vietnam mobilizes over $7 bln for Just Energy Transition
Vietnam has so far mobilized more than $7 billion for its Just Energy Transition agenda under the Political Declaration on the Just Energy Transition Partnership (JETP).
Companies - Wed, July 9, 2025 | 10:38 pm GMT+7
Thailand hopes to conclude US trade talks before new deadline
Thailand is optimistic that it can finalize a trade deal with the U.S. before the August 1 deadline to avoid a 36% tariff imposed by President Donald Trump, according to Finance Minister Pichai Chunhavajira.
Southeast Asia - Wed, July 9, 2025 | 10:34 pm GMT+7
Southeast Asia seeks additional tariff negotiations with US
Southeast Asia's biggest economies are preparing to intensify trade negotiations with the U.S. after being subjected to steep tariff rates, despite having made a series of last-minute proposals aimed at increasing imports and significantly reducing tariffs on U.S. goods.
Southeast Asia - Wed, July 9, 2025 | 10:31 pm GMT+7
Foreign capital massively flows into banking, securities stocks
Foreign investors net bought for the sixth consecutive session on the Vietnamese stock market Wednesday, to the tune of nearly VND2,000 billion ($76.5 million), focusing on banking and securities stocks.
Finance - Wed, July 9, 2025 | 10:17 pm GMT+7
Four new container terminals to be built in northern Vietnam economic hub
Prime Minister Pham Minh Chinh has granted in-principle approval for the development of four new container terminals at Lach Huyen Port in the northern city of Hai Phong.
Infrastructure - Wed, July 9, 2025 | 5:36 pm GMT+7
Sausage mogul eyes $5 bln green energy, cattle project in northern Vietnam
Mai Huy Tan, who founded and later sold the popular Duc Viet sausage brand, has proposed a $5 billion circular economy complex in Quang Ninh province, northern Vietnam.
Industries - Wed, July 9, 2025 | 5:14 pm GMT+7
Northern Vietnam urban-tourism project Cat Ba Amatina has new investor
Hanoi Anpha Real Estate Exchange Co., Ltd. (Hanoi Anpha) has become a major shareholder of Vinaconex ITC, the developer of the Cat Ba Amatina urban-tourism project in Hai Phong city, northern Vietnam.
Real Estate - Wed, July 9, 2025 | 2:57 pm GMT+7
Brazil’s leading food group JBS eyes turning Vietnam into global production hub
JBS, the world’s leading food processing company, is looking to transform Vietnam into a global and regional distribution and production center.
Industries - Wed, July 9, 2025 | 9:51 am GMT+7
Brazilian-backed payment solutions firm Alterosa MK plans expansion in Vietnam
Alterosa MK, a joint venture between Brazil’s Alterosa Group and MK Group of Vietnam, said it expects to receive more support from the two governments for investment expansion.
Finance - Wed, July 9, 2025 | 9:00 am GMT+7
USD price may reach VND26,400 in Q3, VND26,200 in Q4: UOB
Singaporean bank UOB's updated USD/VND projections are 26,400 in Q3/2025, 26,200 in Q4/2025, 26,000 in Q1/2026, and 25,800 in Q2/2026.
Economy - Wed, July 9, 2025 | 8:41 am GMT+7
Vietnam's stock market moving toward sustainability, professionalism: exec
The quality of investors in Vietnam has significantly improved as more and more investors start to adopt asset management strategies and disciplined investing, instead of merely engaging in short-term trading, said Nguyen Hoang Yen, chairwoman of Mirae Asset Securities.
Finance - Tue, July 8, 2025 | 11:40 pm GMT+7
- Travel
-
Indian billionaire to visit Vietnam’s Ha Long Bay with 4,500 employees
-
Vietnam in talks on visa exemptions with 15 countries to boost tourism
-
Foreign businesses in Vietnam urge relaxation of visa, work permit requirements
-
AI can be a game changer for Vietnam tourism
-
Google Doodle honors world's largest cave Son Doong
-
Vietnam allows import of Chinese aircraft under new rule