Vietnam’s 2025 Provincial Competitiveness Index announced

The Vietnam Chamber of Commerce and Industry (VCCI) on May 15 released the Vietnam Private Economic Report 2025 and the 2025 Provincial Competitiveness Index (PCI 2025), unveiling a new-generation assessment framework at a pivotal moment in the country’s economic reform process.

After 21 consecutive years of implementation, this year’s report introduces PCI 2.0, a redesigned version of the widely recognised index. The launch comes as Vietnam enters a new development era, with ambitions to achieve double-digit GDP growth from 2026 onward alongside three unprecedented reforms: reducing the number of provincial-level administrative units from 63 to 34, transitioning to a two-tier local administration model, and institutionalising Politburo Resolution No. 68-NQ/TW, which for the first time identifies the private sector as the most important driving force of the national economy.

For the first time, VCCI also introduced the Business Performance Index (BPI), designed to measure the effectiveness and innovation capacity of the private sector. The index was developed from one of the most comprehensive surveys of Vietnam’s private economy in recent years, covering 3,546 domestic private enterprises, 586 foreign-invested enterprises and 1,001 business households across all 34 provinces and cities.

Meanwhile, PCI 2.0 has been restructured into nine component indicators with 98 criteria, including market entry, access to resources, transparency, administrative compliance costs, informal charges, fair competition, business support policies, legal institutions and facilitating governance.

Instead of publishing conventional rankings, VCCI this year grouped provinces and cities into six categories of governance quality, reflecting the differing conditions following provincial mergers and aligning with international practices. The national median PCI score reached 63.9 out of 100, indicating that reform momentum has continued nationwide.

Five localities are recognised as top performers in alphabetical order: Bac Ninh, Da Nang, Hai Phong, Phu Tho and Quang Ninh. According to the report, these localities demonstrated balanced governance structures, with at least five out of nine component indicators ranking among the nation’s top 10.

Bac Ninh leads the country in facilitating governance and administrative compliance costs, while Da Nang ranks first in market entry conditions. Hai Phong posts outstanding results with seven of its nine component indicators among the Top 10. Phu Tho ranks second nationwide in access to resources. Quang Ninh maintained strong performance in fair competition and facilitating governance.

Speaking at the event, VCCI Chairman Ho Sy Hung said the survey findings suggest that Vietnam’s private sector has moved beyond a defensive phase and is preparing for breakthroughs. In 2025, the number of newly established businesses reached a record 297,500, up 27.4% year-on-year, while 85.7% of enterprises either maintained or expanded operations.

Business confidence is recovering strongly, he stated.

However, the report also highlighted persistent structural bottlenecks. About 60.2% of surveyed firms reported difficulties in finding customers, the highest level recorded in five years. Meanwhile, 75.5% said they were unable to access bank loans without collateral, and only 6 8% believed they could accurately predict policy changes. Business households also faced mounting pressure, with 81.5% reporting declining revenues over the past year.

The VCCI leader stressed that the data should serve not as grounds for pessimism, but as a valuable basis for policymakers at both central and local levels to identify priorities, implement targeted reforms and measure reform outcomes more effectively. He noted that while institutional reforms are moving in the right direction, significant gaps remain between central-level policy design and implementation capacity at the local level.

The newly launched BPI, comprising 23 indicators measuring private-sector development and innovation capacity, seeks to complement PCI by evaluating “market outputs”, which are businesses' survival, profitability and advancement in value chains, rather than solely institutional inputs. Pilot BPI 2025 results placed Ho Chi Minh City first with 5.67 points, followed by Hanoi with 5.41 points and Quang Ninh with 5.33 points. The national median score stood at 4.20.

According to VCCI, the report marks the first time a nationwide assessment has combined provincial-level governance quality with a broad overview of Vietnam’s private economy, which now includes more than one million enterprises and 6.1 million business households that employ a total of approximately 26 million workers, equivalent to 50.2% of the country’s workforce./.