On October 14, 2026, state-run media reported that the Vietnamese stock market had suffered a severe crash: 80% of stocks lost more than 62% of their value. Is this the consequence of massive public investment projects aimed at driving double-digit GDP growth?
A harsh reality is unfolding on the trading floor, and the Vietnamese stock market is experiencing a severe crash, with as many as 80% of listed stocks officially entering a prolonged downtrend due to investor pessimism and an economic slowdown.
Accordingly, the recorded declines have been very steep, typically ranging from 45% to 62% of their all-time highs. This rapid downward spiral is occurring against a backdrop of significantly reduced market-wide liquidity, which frequently remains below 15,000 billion VND per trading session.
This widespread decline raises a question: Could this be an indirect consequence of the policy to aggressively push large-scale public investment projects in a rush to meet the Vietnamese government’s goal of double-digit GDP growth?
According to macroeconomic experts, public investment in major key infrastructure projects—such as expressways, urban railways, and seaports—essentially serves as the government’s “seed capital,” necessary to enhance the national economy’s long-term competitiveness.
However, setting an overly ambitious GDP growth target of over 10 percent—while Vietnam’s economy is actually growing at only 7–8 percent, according to the World Bank—has created enormous additional pressure on the monetary system and the flow of social capital.
In the short term, the race to disburse massive public investment funds has triggered a “capital crowding-out” effect—a phenomenon that occurs when the government increases borrowing or public spending to an excessive degree, leading to a contraction in capital sources and investment opportunities for the private sector.
When the government monopolizes too many financial resources in the economy, private enterprises are “squeezed out” and face difficulties in accessing capital to expand their production and business operations.
At that point, capital flows in the economy are heavily drawn into production-related channels such as construction materials, machinery, and labor costs…, causing capital in the stock market to naturally decline.
Furthermore, injecting a massive amount of money into the economy over a short period to fund infrastructure projects always carries the risk of sudden, surging inflation.
To control this pressure and maintain macroeconomic stability, the State Bank of Vietnam is forced to implement monetary tightening measures or maintain deposit interest rates at the most attractive levels.
At that point, capital tends to flow out of the stock market and shift back into savings channels, into bond purchases, or directly into production and business operations.
When market liquidity falls below the 20,000 tỷ đồng mark per trading session, record net selling by foreign investors—which at one point reached 14,000 tỷ đồng in just one week—further exacerbates the already extremely fragile sentiment among investors.
However, the sharp decline in securities and real estate stocks is also the result of a brutal synergy stemming from the credit tightening cycle, as well as pressure from maturing corporate bonds, and so on.
Public investment is not the direct cause of the financial market’s collapse, but the policy mindset of chasing double-digit GDP growth targets at any cost has created an extremely strained monetary environment.
According to economic experts, an economy cannot develop healthily if it relies solely on short-term, artificially inflated GDP growth figures on paper, especially when the financial health of businesses and market capital flows are currently being drained dry.
Trà My – Thoibao.de
