Hanoi’s economy gains momentum in early 2025

THE HANOI TIMES — Hanoi posted strong economic gains in the first five months of 2025, setting the pace for its 8% growth goal as industrial output, retail, tourism, and foreign investment rebounded sharply.

Industrial production rose 5.5% year-on-year, driven by high-tech manufacturing and clean technology, while foreign direct investment soared to nearly $2.9 billion—2.6 times higher than the same period last year. Consumer spending, e-commerce, and tourism also saw double-digit growth, reinforcing Hanoi’s role as a key economic engine for Vietnam.

Industrial production continues to recover, driven by strategic restructuring. Hanoi’s industrial production index rose 5.5% year-over-year, contributed by significant growth in machinery manufacturing (up 28.3%), textiles (up 14%), and automotive production (up 12.9%). These gains reflect the city’s emphasis on high-tech, supported by the expansion of industrial parks and cleaner technologies.

According to the Hanoi Department of Industry and Trade, the city is prioritizing industries with competitive advantages and high value-added potential. “This is about building foundational sectors that can integrate deeper into global supply chains and support a cleaner, more sustainable economy,” said Dr. Nguyen Dinh Cung, former Director of the Central Institute for Economic Management.

Total sales of goods and consumer services reached approximately $15 billion, up 13% from the same period last year. Meanwhile, e-commerce grew by more than 50%, fueled by digital platforms, cashless payment systems, and evolving consumer habits. The service sector experienced robust demand and a variety of stimulus measures, such as extended discount programs and flexible delivery models.

Between January and May, Hanoi welcomed 3.2 million arrivals, up 25.1% year-on-year, boosting demand for accommodations, food, shopping, and entertainment.

Total foreign direct investment (FDI) reached nearly $2.9 billion, which is 2.6 times higher than during the same period in 2024. Online business registration procedures supported business operations, improving efficiency and transparency.

Hanoi's state budget revenue totaled around US$14.2 billion, marking a 54.4% year-on-year increase. Domestic revenue alone accounted for more than US$13.6 billion of this total with key contributors including land use fees, personal income tax, and revenue from the non-state enterprise sector.

"These results prove that production and business activities are recovering strongly," said Dr. Bui Quang Tuan, Director of the Vietnam Institute of Economics. "However, the challenge now lies in maintaining the pace, investing smarter, and opening up new areas such as the digital economy and green growth."

Measures for growth momentum 

To sustain this momentum, Hanoi has outlined several key priorities. The city will ease regulatory bottlenecks for businesses, monitor shifts in global trade policy, and proactively expand markets. Additionally, the city conducts measures to accelerate industrial production, support input sourcing, and bolster participation in international supply chains.

In tourism, authorities are developing digital infrastructure to improve visitor experiences. This includes smart information platforms, updated maps, and digital services at key sites. The city is also promoting OCOP (One Commune, One Product) items, which focus on local specialties and community-based businesses.

Economic innovation remains a focus with significant investment in digital economy, financial technology (fintech), and energy transition. The revised Capital Law provides a new framework for piloting reforms and accessing new resources in science and technology. Furthermore, Hanoi intends to strengthen its education sector to support the development of a high-quality workforce.

Public investment is another critical lever. Authorities have launched a comprehensive effort to address longstanding delays in land clearance, resettlement, and price fluctuations for construction materials. The goal is to disburse over 95% of the 2025 capital budget, prioritizing strategic infrastructure and essential housing projects.

Administrative reform is accelerating to reduce compliance costs and shift from pre-checks to post-checks as Chairman of the Hanoi People’s Committee Tran Sy Thanh stressed the importance of accountability.

Looking ahead, Hanoi aims to register 30,000 new firms in 2025, over 50% of which will be innovation-focused. Between 20 and 25 companies are expected to be recognized for their key industrial products, including up to 15 first-time honorees. The city also aims to increase total retail and service turnover by 9% to 10% this year.

Support for businesses will remain central. "Helping firms master core technologies and scale globally is not just policy; it's a survival strategy in this new economic era," said Nguyen Van, Vice Chairman of the Hanoi Supporting Industries Business Association.

With reforms gaining pace and fundamentals holding strong, Hanoi is moving forward to achieve the 8% economic growth target this year and double-digit goals in the following years.