Public investment disbursement could add 2% to GDP growth

According to experts, if Vietnam disburses the entire public investment capital plan assigned by the Prime Minister in 2025, GDP growth could be boosted by an additional 1.8 to 2 percentage points.

Construction site of Provincial Road 940 project ( Can Tho city). Photo: Tuan Phi/VNA

This is a significant contribution, demonstrating the leading role of public investment in the context of the economy needing strong recovery momentum. However, to realize this goal, removing inherent bottlenecks in the public investment disbursement process is still an urgent requirement, especially problems related to legality, administrative procedures, local implementation capacity and site clearance.

GDP could increase by 1.8 - 2%

In mid-September 2025, UOB Bank (Singapore) unexpectedly raised its forecast for Vietnam's GDP growth in 2025 to 7.5% from the previous 6.9%. This is one of the few international financial institutions that forecast Vietnam's GDP growth at a high level of over 7% this year, despite risks and instability from US tariff policies.

According to UOB, one of the key growth drivers this year is Vietnam’s acceleration of public investment. Facing external challenges, Vietnam announced a $48 billion infrastructure investment plan in mid-August, covering 250 projects. The state will fund 129 projects, focusing on urban and transport development with a total capital of $18 billion. The remaining 121 projects, worth $30.5 billion, will be mobilized from other sources, including foreign enterprises.

This move is considered a strategic step to strengthen the foundation for sustainable economic growth; at the same time, creating room for businesses, especially small and medium enterprises (SMEs), to participate more deeply in domestic and regional value chains.

Mr. Suan Teck Kin, Head of Global Economics and Markets Research, UOB Bank, said that the role of the Government is very important in laying the foundation for long-term benefits through continuous investment in infrastructure now. This investment includes both hard and soft infrastructure: seaports, railways, roads, airports, electricity, water, education , health and legal. Only with a solid foundation from improving infrastructure can the country rise and stand firm.

At the Vietnam Economic Forum with the theme "What is the driving force for GDP growth of 8.3 - 8.5%", organized by Nguoi Lao Dong Newspaper on September 26, Dr. Can Van Luc, Chief Economist of BIDV Bank, said that if Vietnam can disburse the entire public investment capital plan assigned by the Prime Minister in 2025, GDP growth can be improved by 1.8 to 2 percentage points.

According to Dr. Luc, this is a positive factor but has not yet been fully reflected in the forecasts of international organizations, including the World Bank's report. This leads to international organizations continuing to forecast Vietnam's GDP growth at a relatively cautious level, not fully reflecting the growth potential from public investment.

“The growth target of 8.3 - 8.5% is feasible, but we also need to prepare for a lower scenario, around 8%. To achieve that, both consumption and investment must be strongly stimulated. New drivers such as the digital economy and improved labor productivity will be the key,” Dr. Can Van Luc commented.

Removing inherent bottlenecks in public investment

According to the Ministry of Finance's report, by the end of August 2025, the disbursement of public investment capital nationwide reached 46.3% of the plan assigned by the Prime Minister, higher than the same period in 2024 (40.4%). Although the results were more positive than the same period, to ensure the target of disbursement of capital reaching 100% this year, the pressure towards the end of the year is very great.

Economist - Dr. Tran Du Lich assessed that, among the three main pillars of economic growth including consumption, export and public investment, public investment is playing a key role in the current context. In particular, promoting disbursement in the fourth quarter not only helps stimulate aggregate demand but also creates a direct effect on real growth.

However, a major bottleneck that has prevented the effectiveness of public investment from meeting expectations is time - a factor that is being wasted significantly. Many key infrastructure projects, especially in the transport sector, are still being delayed due to problems with procedures, compensation, or lack of initiative in construction organization.

According to Dr. Tran Du Lich, for projects that have met legal and resource requirements, it is necessary to implement the "3-shift, 4-team" continuous construction model to shorten the progress. This method not only helps save time - an invisible but very expensive cost - but also creates a rapid spillover effect for the entire economy.

In addition, prioritizing the use of domestic construction materials such as iron, steel, cement, stone, etc. will both promote the domestic industry, reduce import pressure and support trade balance. This is also an important solution to contribute to promoting GDP growth this year.

To speed up disbursement and construction progress, removing institutional bottlenecks, especially in site clearance and improving project quality, remains a prerequisite. Only when public investment projects are implemented on schedule and effectively, can they play a leading role, activating social capital flows and promoting sustainable economic growth.

Prof. Dr. Hoang Van Cuong, Member of the Prime Minister's Policy Advisory Council and Member of the National Assembly's Economic and Financial Committee, also said that public investment is the "seed capital" to attract private investment, thereby promoting investment in the whole society. When the State invests capital, it will create trust and expectation, attracting many other investors to participate, contributing to the formation of a stronger and more sustainable growth engine.

There are currently about 2,200 public and private investment projects stalled due to legal and infrastructure problems, with a total capital of up to 6 quadrillion VND. If we can unblock them, this huge resource will be immediately pumped into the economy, promoting growth. However, he also emphasized that if disbursement is massive without control, the risk of inflation will appear.

From a business perspective, Mr. Phan Huu Duy Quoc, Chairman of the Board of Directors of Construction Corporation No. 1 (CC1), said that many businesses in the industry are accelerating the construction of a series of key national projects such as 15 North-South expressway packages, Long Thanh airport, or Dong Hoi T1 terminal. These are all important projects directly directed by the Government and the Prime Minister, with the goal of completing them earlier than planned.

“I completely agree with the view that public investment, especially infrastructure, has a spillover role and creates a foundation for the future. However, speeding up progress is also leading to escalating costs,” said Mr. Quoc.

According to this person, labor costs at many construction sites have doubled - from 500,000 VND/day to 1 million VND/day - but it is still difficult to recruit enough workers. Construction material prices, especially sand, have also increased sharply from 300,000 VND/m³ to 800,000 VND/m³. Although contractors have to implement "3 shifts, 4 shifts" to meet progress requirements, the current mechanism has not yet been adjusted appropriately to support arising costs, causing businesses to face many difficulties in balancing their finances.

Therefore, Mr. Quoc suggested that it is necessary to redesign the contract and budget mechanism from the beginning, taking into account options to speed up progress and incur corresponding costs. The State and enterprises need to "run a long marathon", instead of unsustainable "sprints", which can easily lead to plan failure and inefficiency in the long term.

Source: https://baotintuc.vn/kinh-te/giai-ngan-dau-tu-cong-co-the-cong-them-2-vao-tang-truong-gdp-20250927151637256.htm