Vietnam has created another positive surprise, with the economy expanding 8.2% year on year in the third quarter, far stronger than market expectations of 7.2% and slightly above Deutsche Bank’s forecast of 8%, according to a recent report.

Its year-to-date growth reached 7.8%, keeping the Southeast Asian country on track for about 8% growth in 2025, finds Deutsche Bank Research’s Vietnam’s Ambitious Growth Play report, which also highlights a major milestone in the country’s global integration, that of FTSE Russell’s decision to upgrade the country’s securities market from frontier to secondary emerging market status, effective September 21 2026, pending an interim review in March 2026.

The move follows reforms that removed the pre-funding requirement for foreign institutional investors and introduced a non-pre-funding model for trade settlement.

Vietnam is also targeting a future MSCI upgrade, which, Deutsche Bank Research notes in the report, “will keep the government on the reform path, improving access to domestic markets and easing capital account restrictions”.

The combined FTSE and MSCI upgrades, the World Bank estimates, could generate net inflows of up to US$25 billion by 2030.

Vietnam has posted, the report points out, broad-based strength across sectors. Exports expanded 16% year to date through September, driven by strong demand for technology goods, while public investment surged 28.7% in the third quarter.

Retail sales grew 10.1%, and foreign direct investment ( FDI ) increased 8.5%, supported by credit growth of 20% through the first nine months. Monetary conditions remained easy, though the State Bank of Vietnam refrained from cutting rates amid dong weakness.

Fiscal policy, the report shares, “will continue to play a prominent role in supporting the government’s ambitious growth target”.

Reforms, infrastructure push long-term ambitions

At the on-going National Congress starting October 20, Vietnam is to reaffirm its goal of annual GDP growth of 10% from 2026 to 2030, and its ambition to reach high-income status by 2045.

General secretary To Lam, the country’s top leader, has called for “strategic breakthroughs in institutions, infrastructure and human resources”.

Recent changes in country are described as an “institutional revolution” in the report, which highlights the reduction of ministries from 18 to 14 and the elimination of district-level operations, with an estimated 100,000 job cuts as part of the streamlining effort.

Infrastructure remains a central pillar of Vietnam’s growth strategy. The government has revived major projects, including two nuclear power plants worth USS16 billion, a US$67 billion North–South high-speed railway, an US$8 billion rail link to China and new deep water ports to reduce logistics bottlenecks and strengthen its position as a regional manufacturing and logistics hub. Notably, the nation has neither high-speed railways nor nuclear power plants to date.

To finance these projects, Vietnam plans to widen its budget deficit to around 5% of GDP, with public debt projected to rise to 45% of GDP by 2030. The government also expects FDI to expand by about 10% annually through 2030, with US$150 billion to US$200 billion in implemented projects over the 2026-2030 period.

Foreign-invested firms currently account for roughly two-thirds of exports and drive Vietnam’s positive goods trade balance. Authorities also aim to increase local content to 40% to deepen domestic participation in production chains.

While challenges remain from “China’s mineral gambit” and a more complex global environment, renewed US-China tensions, the report states, could prompt further FDI interest in Vietnam. The country ranks sixth globally in rare earth reserves and continues to expand its external partnerships, with 18 free trade agreements and a growing network of 12 comprehensive strategic partners and nine strategic partners.

Vietnam’s efforts to establish international financial centres in Ho Chi Minh City and Danang, the report points out, are designed to facilitate offshore investment and financing without prior central bank approval. These reforms, it adds, will be key to aligning Vietnam’s financial markets with international standards as the country moves toward its 2045 vision.