The Vietnamese government has set an ambitious target for stock market capitalization to reach 120% of GDP by 2028, a level comparable to regional and global economies. This strategic move aims to transform the stock market into a vital medium and long-term capital mobilization channel, thereby sharing the financial burden currently placed on the banking sector.

During a socio-economic discussion on 21/4, Nguyen Hai Nam, a specialized member of the Economic and Financial Committee, highlighted that investment capital for the economy flows through two main channels: bank credit and capital markets, which include bonds and stocks. Currently, the banking sector's credit volume stands at approximately 145% of GDP. This figure is significantly higher than in many other countries in the region, creating substantial pressure and potential risks related to non-performing loans or capital adequacy ratio (car).

In principle, banks primarily provide short-term capital to the economy, while long-term capital should originate from the capital market. Mr. Nam emphasized the critical need for synchronous development of this second capital channel, encompassing both bonds and stocks, to ensure sustainable economic growth.

Explaining before the National Assembly, Deputy Prime Minister Nguyen Van Thang affirmed that the capital and stock markets are actively being developed to serve as key medium and long-term fundraising channels for the economy. By achieving the 120% GDP target by 2028, the stock market is expected to play a crucial role in providing essential long-term capital, reducing the over-reliance on bank lending.

By the end of 2025, Vietnam's stock market capitalization reached nearly 10 million billion dong, accounting for approximately 77,9% of the country's GDP.

Deputy Prime Minister Nguyen Van Thang speaking on the morning of 21/4. Photo: National Assembly Media

Earlier, Finance Minister Ngo Van Tuan also noted that the stock market is poised to attract significant capital following FTSE Russell's confirmation of its upgrade from a frontier market to a secondary emerging market, effective from 21/9. This upgrade is anticipated to draw increased foreign investment and boost market liquidity.

The government bond market, after a period of quietness, has shown clear signs of recovery. Mr. Tuan stated that this year, capital mobilization through government bonds is targeted to reach 900,000 billion dong, an increase of 100,000 billion compared to 2025.

Regarding fiscal policy, Deputy Prime Minister Nguyen Van Thang indicated that regulators would implement a reasonably expanded policy with clear priorities. This approach aims to effectively utilize state resources and foreign loans to stimulate growth and support macroeconomic stability.

According to Mr. Thang, the government has presented a national financial plan to the National Assembly, proposing to increase the average budget deficit ratio from 3% of GDP in the previous period to 5% of GDP over the next five years. Simultaneously, regulators plan to increase budget spending, with 40% allocated to development investment – an allocation 2,4 times higher than the previous period.

The government is also proposing to the National Assembly to continue issuing new tax and fee incentive policies. These measures are designed to provide crucial support for individuals and businesses as the economy navigates adverse external fluctuations.

Anh Tu