World Bank: Vietnam's economic growth remains strong

Production and processing of canned fish for export at KTC canned food factory, Kien Giang Trading Joint Stock Company.

This is a higher growth rate than most economies in the region, demonstrating the strong resilience of the economy, in the context of the global economy still facing many uncertainties.

According to the Vietnam Economic Update Report recently released by the World Bank (WB) on September 8, this result creates an important foundation for Vietnam to aim for high growth throughout 2025, even when the international economic environment is being simultaneously impacted by geopolitical and trade challenges.

Speaking at the report launch event, Mr. Sacha Dray - WB economist in Vietnam - commented: "Vietnam is currently the fastest growing economy in the region, surpassing many countries such as Indonesia, Malaysia or Thailand". According to him, the main driver of growth comes from the strong increase in export activities, leading to a vibrant increase in manufacturing and processing industry output, logistics services and transportation.

The World Bank forecasts that Vietnam's GDP will grow by 6.6% in 2025, then slightly decrease to 6.1% in 2026, before recovering to 6.5% in 2027. The WB report analyzes that as an export-oriented economy, Vietnam will be hard-pressed to avoid the impact of slowing global growth prospects and falling demand from key markets. In addition, uncertainties in trade policy can affect consumer confidence as well as business confidence. However, in the midst of the difficult cycle, Vietnam still maintains a clear competitive advantage as an attractive manufacturing destination in the region.

Ms. Mariam J. Sherman, World Bank Country Director for Vietnam, Cambodia and Laos, assessed: "With a low public debt ratio, Vietnam has abundant fiscal space to respond to external fluctuations."

To strengthen growth and minimize risks, the World Bank recommends that Vietnam continue to boost public investment, strictly control risks in the financial system, and further promote structural reforms.

Mr. Sacha Dray said that in recent times, the allocation rate of public investment capital at both central and local levels has improved significantly. The Vietnamese Government has also demonstrated strong political commitment through the establishment of specialized agencies and committees to coordinate and promote disbursement. However, he also noted that there are still many challenges that need to be overcome to improve the efficiency of using this capital source.

“If implemented effectively, public investment will not only help address infrastructure bottlenecks, but also create more jobs. More importantly, Vietnam needs to persistently promote reforms to strengthen the essential service system, develop a green economy, improve the quality of human resources and diversify trade markets. These are the fundamental factors that help minimize global risks and maintain long-term growth momentum,” Ms. Sherman added.

An important highlight of this report - with the theme "Breakthrough in developing Vietnam's high-tech talent" - is the WB's recommendation on building a high-quality workforce to support innovation and realize Vietnam's goal of becoming a high-income country by 2045.

According to the World Bank, Vietnam needs not only to expand the number of graduates in STEM (science, technology, engineering and mathematics) fields, but also to develop a core team of experts capable of leading research, managing laboratories and transforming ideas into commercial products.

The report also said that Vietnam still has a lot of room to increase spending on research and development (R&D), from both the public and private sectors. Currently, Vietnam's R&D spending is still lower than many countries in the region. Therefore, Vietnam needs to expand the team of lecturers with doctoral degrees, develop excellent researchers, and strongly promote the linkage between universities - enterprises - the State. This will be the key to forming a market-ready workforce, promoting technology transfer and knowledge diffusion.

Taking Stock - Vietnam Economic Update is a periodic publication published twice a year by the WB, providing a comprehensive view of growth prospects, challenges and policy recommendations for Vietnam in the medium and long term.

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