"Since august, almost every meeting has begun with partners requesting price reductions. If we do not comply, they will leave," said Cao Huu Hieu, general director of Vietnam National Textile and Garment Group (Vinatex), in late 2025.

Partners who had worked with Vinatex for 20 to 30 years also demanded a 20% reduction in unit prices. "After each negotiation, a new, lower price level was established, at least 5% cheaper than before," he shared.

Vinatex's experience reflects the general situation for Vietnamese businesses last year: striving to maintain profit margins amidst pressure from US tariff policies, geopolitical conflicts, and shifting orders.

However, 2025 was not the only challenging year for the business community. Looking back at the 2021-2025 period, businesses faced impacts from the pandemic, supply chain disruptions, geopolitical conflicts, and inflation. Specifically, textile and garment export turnover fell by 11% in 2023, to nearly 40 billion USD, due to declining purchasing power in major markets like the US and the EU. Hieu stated that in Vinatex's three decades of existence, "businesses have never faced such difficulties."

Despite these challenges, Vinatex concluded 2025 with a consolidated profit of 1,355 billion VND, exceeding its plan by 50%. "No unit incurred losses; they only varied in profit," Hieu said, attributing the results to lean management and a willingness to make short-term sacrifices to retain market share.

Vietnam's GDP over the past ten years, with a 2026 target. Graphics: Phuong Dung

The resilience of the business community was a key factor in the economy's recovery and renewed growth momentum. In the final year of the 2021-2025 term, Vietnam met and surpassed 15 out of 15 socioeconomic targets.

GDP in 2025 is estimated to reach approximately 8,02%, more than three times the growth rate of 2021, placing it among the highest in ASEAN and globally. Over the past five years, average GDP growth was approximately 6,3% annually, higher than the previous term.

The economy's size in 2025 is estimated at around 510 billion USD, with per capita GDP reaching 5,026 USD, elevating Vietnam to a high-middle income nation. The economy's global ranking also improved by four to five positions, reaching 32nd worldwide.

Doctor Le Duy Binh, director of Economica Vietnam, noted that a crucial foundation for rapid economic recovery was the government's steadfast commitment to macroeconomic stability, coupled with the flexible use of fiscal, monetary, trade, and investment tools.

"The strong engagement of the entire political system, alongside the adaptability of businesses and people, created significant resilience for the economy," he told VnExpress.

Following the Covid-19 pandemic, Vietnam chose a recovery model based on three pillars: the domestic market, exports, and public investment. Public investment played a leading role, activating private and foreign direct investment (FDI) capital flows, and boosting production and business activities. This funding increased total social investment, supporting rapid and sustainable growth. Calculations indicate that for every 1% increase in public investment disbursement during 2021-2025, GDP could rise by an additional 0,058 percentage points.

According to Doctor Tran Du Lich, this approach helped the economy recover amidst global volatility.

Vietnam's economic size in 2025 compared to other ASEAN countries. Graphics: Anh Tu

From a business perspective, Dang Thanh Tam, chairman of the Board of Directors of Kinh Bac City Development Holding Corporation (KBC), observed a clear process of economic restructuring. "Never before have investment decisions at ministries, agencies, and localities been implemented as quickly as they are today," he said.

Another pillar Tam highlighted is economic diplomacy. Establishing comprehensive strategic partnerships with most major countries expanded development opportunities and attracted high-quality FDI. Businesses gained more opportunities to diversify export markets and strengthen their position in global supply chains by completing new-generation free trade agreements (FTAs) like RCEP, and signing bilateral FTAs (Vietnam - UAE, Vietnam - Israel).

"Foreign investors are targeting the US market and beginning to shift their export structures to Europe from within Vietnam," Tam said.

Workers at a textile and garment factory in Da Nang. Photo: Nguyen Dong

Vietnam aims for double-digit growth in 2026. This year is pivotal in the next five-year economic development plan, setting the stage to become a high-middle income country by 2030 and a high-income nation by 2045.

According to Nguyen Thi Thu Hien, general director of Techcom Securities (TCBS), key growth drivers include continued acceleration of public investment and a more pronounced recovery in the private sector. These factors are crucial for strengthening production and business foundations.

Dang Thanh Tam remarked that the core issue is improving capital absorption capacity, policy implementation, and project deployment through unified planning. "Vietnam's GDP could enter the top 10 globally in the next decade," he anticipated.

However, achieving the double-digit GDP growth target presents challenges, given increasing strategic competition among major countries and ongoing global supply chain restructuring.

Vinatex's leadership stated that businesses no longer rely on "several million product" orders, which were once the industry's backbone. Vietnam's textile and garment sector is now positioned in the mid-to-high-end segment, requiring skilled labor, flexible production, and the ability to handle complex orders with frequent product code changes in short periods. "Sometimes, a production line must switch to a new product code in just two to three days, no longer working on one code for weeks," Hieu shared.

To adapt, businesses must alter their strategies. Dang Thanh Tam cited companies participating in social housing development for workers, which offers low profit margins but ensures staff stability for sustainable production. Additionally, proactively preparing high-tech infrastructure and clean energy is likened to building a "smart port to welcome large ships."

For manufacturing businesses, Vinatex's leadership noted they must continuously restructure and increase productivity to optimize costs, both to retain jobs for workers and ensure profits. They also optimize resources by focusing on high-value products, rather than mass orders with low profit margins that are shifting to countries with cheaper labor costs.

Nguyen Duc Hung Linh, deputy general director of AgriS Investment Division, observed that green standards (ESG) and traceability requirements are becoming key factors determining the competitiveness of Vietnamese goods.

"Businesses can only escape the 'low scale - low profit trap' by moving up the value chain or directly participating in global production chains," Linh noted.

In this regard, Dang Thanh Tam stated that green transformation will be a mandatory "passport" for businesses. Though costly, he believes it is a necessary sacrifice for businesses to contribute to the common goal, as Vietnam has committed to achieving Net Zero by 2050.

Phuong Dung