Unlocking more than $38 billion in public investment to drive growth

Unlocking more than $38 billion in public investment to drive growth

According to the Ministry of Finance, the Government and Prime Minister have assigned a total public investment plan of VNĐ1.014 quadrillion for this year, including VNĐ364 trillion from the central budget and VNĐ650 trillion from local budgets. Including additional local budget funds, the total planned capital reached VNĐ1.029 quadrillion as of August 6.

Provincial leaders conduct a quick inspection of public investment disbursement progress at the Văn Thánh Bridge construction project in Phan Thiết Ward, Lâm Đồng Province. — VNA/VNS Photo

Public investment disbursement is emerging as a key driver that Việt Nam can actively harness to support economic growth this year.

With more than VNĐ1 quadrillion (US$38.5 billion) allocated, a record high, the Government is seeking to remove bottlenecks, reallocate capital and accelerate project implementation in ministries, agencies and localities where disbursement remains slow, with the ultimate goal of achieving 100 per cent disbursement.

According to the Ministry of Finance, the Government and the Prime Minister have assigned a total public investment plan worth VNĐ1.01 quadrillion for this year, including VNĐ364 trillion from the central budget and VNĐ650 trillion from local budgets. After including additional local budget funds, total planned capital reached VNĐ1.03 quadrillion as of August 6.

This large-scale funding provides significant resources for infrastructure development and expansion of economic space, but also puts considerable pressure on implementation.

Public investment was estimated at around VNĐ1.1 quadrillion this year, up 31 per cent year-on-year, according to Dr Cấn Văn Lực, chief economist and director of the BIDV Training and Research Institute. He described it as an important source of growth if the capital can be promptly translated into infrastructure and new production capacity.

However, disbursement remains relatively slow. As of August 6, VNĐ433.454 trillion had been disbursed, equivalent to 42.7 per cent of the plan assigned by the PM. The pace also slowed sharply in early August, with disbursement during August 1-6 amounting to only VNĐ8.1 trillion, or about one-fourth of the previous week’s figure.

This means a substantial amount of capital must be disbursed in the remaining months of the year, requiring much faster implementation.

Disbursement performance varies significantly among ministries, central agencies and localities. Eight central ministries and agencies and 22 localities had disbursement rates at or above the national average. 

Among the top performers, the Vietnam Bank for Social Policies has fully disbursed its allocated capital, while the Vietnam Expressway Corporation and Vietnam Development Bank reached 84.5 per cent and 78.1 per cent, respectively. The Ministry of Industry and Trade also recorded a relatively high rate of 61.8 per cent.

However, 25 central ministries and agencies and 12 localities remain below the national average, highlighting significant differences in implementation capacity.

Against the backdrop of Việt Nam’s ambitious growth target for 2026, accelerating public investment is more than a matter of fulfilling the State budget plan.

Lực said public investment would remain a key growth driver and that achieving 100 per cent disbursement could add around 1.8 percentage points to economic growth.

The impact goes beyond direct Government spending. Infrastructure projects generate demand for construction materials, machinery, transport and services, while newly developed infrastructure can facilitate investment and production in the years ahead.

Economica Vietnam Director Lê Duy Bình said that amid uncertain external factors, public investment is one of the growth drivers Việt Nam can actively control.

GDP grew 8.18 per cent in the first half of the year, but sustaining strong growth in the second half would depend significantly on public investment disbursement, private investment and the removal of economic bottlenecks.

He noted that effectively disbursing more than VNĐ1 quadrillion would not only boost aggregate demand, but also strengthen infrastructure, expand development space and improve the economy’s competitiveness. He therefore called for disbursement to reach at least 99 per cent, ideally 100 per cent, to support strong growth this year.

One immediate priority is to address capital that has yet to be allocated to specific projects. As of August 6, VNĐ19.8 trillion in central budget capital remained unallocated, equivalent to around 2 per cent of the PM’s assigned plan. Some agencies received additional funds only in June and July and need more time to complete investment procedures, while others have proposed reducing allocations due to a lack of demand.

The use of key performance indicators to monitor and supervise public investment disbursement should also be directly linked to the responsibilities and performance of each unit. The wide gap between units that have disbursed more than 50 per cent of their allocated capital and those that have disbursed less than 10 per cent, or have yet to disburse any funds, shows significant differences in implementation capacity despite operating under the same regulatory framework.

Accelerating public investment should also go hand in hand with removing institutional bottlenecks and encouraging private investment. If public and private capital can be mobilised simultaneously, they could provide a dual boost to aggregate demand and create additional momentum for economic growth in 2026. 

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