Vietnam Country Risk Rating
Overall risk in Vietnam remains at a medium-high rating.
Vietnam's overall risk is medium high. Its political landscape has settled after years of turbulence, and the risk of political violence is assessed as medium. A wave of elite resignations between 2023 and 2024 under the anti-corruption campaign removed a president, a National Assembly chairman and other senior figures, and following the death of Nguyen Phu Trong, former public security minister To Lam rose to General Secretary, the most powerful post in the country. In April 2026, lawmakers also elected him state president for the next 5 years, and at the National Congress he secured a second term as party chief through 2030. This breaks with Vietnam's tradition of collective leadership and concentrates authority in a single figure. Analysts are divided on the consequences, with fewer factional obstacles expected to allow faster, more coherent policymaking, useful for the reform agenda and the target of roughly 10% annual growth toward high income status by 2045, while the narrowing of internal debate raises the risk of unchecked policy error and a drift toward greater authoritarianism. Lam has vowed to pursue a growth model less dependent on low-cost manufacturing, and foreign investors broadly regard him as pro-business, though his backing of national champions has prompted concern over favoritism, corruption and asset bubbles. In this regard, corruption remains embedded, though the authorities are tackling it actively. Indeed, the World Bank reports that since 2025 Vietnam has passed more than 86 laws and 300 decrees to cut red tape, modernize the tax, customs, judicial and insolvency systems and open capital markets to domestic and foreign investors. These sit against limited freedom of speech, uneven law enforcement, inconsistent regulatory interpretation and frequent tax changes, which together keep legal and regulatory risk at medium high.
On the supply chain front, risk remains medium. Rising tariff uncertainty and geopolitical tension have pushed companies to spread production across more countries rather than rely on one, which strengthens Vietnam's appeal as a place to relocate, helped by its stability and its many free trade deals. Working the other way, the Middle East conflict added up to two weeks each way to shipping routes to Europe, raised freight costs and cut off trade to Gulf markets through the Strait of Hormuz. The risk of doing business is also medium and the big change in 2026 is the overhaul of the investment rules. The updated Law on Investment, fully in force by mid-year, makes it easier to enter the market, speeds up approvals and adds a fast track for major high-tech projects. A single package of laws on July 1st brought 29 laws and dozens of decrees into force at once, covering digital business, tax and investment. The catch is that oversight has moved from heavy upfront approvals to closer checks once a company is up and running, so the rules firms must follow day to day are now tighter. Some old problems remain, including a shortage of skilled workers in high tech and the effect of ongoing government restructuring on licensing and project approvals.
On the economic front, the IMF expects growth of 7.1% in 2026, slowing to 6.7% in 2027. It also sees gross government debt falling from 29.8% of GDP in 2026 to 29.0% in 2027, which keeps sovereign non-payment a medium level risk. The risk of the inability of the government to provide stimulus is assessed medium low, and the World Bank's view helps explain why, as it expects an investment led spending push to lift private activity and consumption, with relatively low public debt leaving room to spend more and absorb shocks. That room is backed over the medium term by a broad set of capital market and structural reforms alongside a USD 320bn public infrastructure plan. The Fund expects the budget deficit at 2.0% of GDP in 2026 and 1.6% in 2027, which shows that the fiscal position is comfortable enough to cushion the economy if growth slows sharply. Short term help is already in place, as Vietnam extended its fuel tax suspension to the end of June to steady the market while the Iran war disrupted supplies.