World Bank: Vietnam's economic growth remains strong

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

This growth rate is higher than most economies in the region, demonstrating the strong resilience of the economy amidst ongoing global economic uncertainty.

According to the Vietnam Economic Update report recently published by the World Bank (WB) on September 8th, this result creates an important foundation for Vietnam to aim for high growth in 2025, even as the international economic environment is simultaneously affected by geopolitical and trade challenges.

Speaking at the report launch event, Mr. Sacha Dray, the World Bank's economist in Vietnam, stated: "Vietnam is currently the fastest-growing economy in the region, surpassing many countries such as Indonesia, Malaysia, and Thailand." According to him, the main driver of growth comes from the strong increase in export activity, which has led to a vibrant increase in manufacturing, logistics, and transportation services.

The World Bank forecasts that Vietnam's GDP will grow by 6.6% in 2025, then decline slightly to 6.1% in 2026, before recovering to 6.5% in 2027. The WB report analyzes that, as an export-oriented economy, Vietnam is likely to be affected by the slowdown in global growth and declining demand from key markets. Furthermore, uncertainties in trade policy could impact consumer and business confidence. However, amidst these challenges, Vietnam maintains a clear competitive advantage as an attractive manufacturing destination in the region.

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

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

Mr. Sacha Dray stated that, in recent times, the allocation rate of public investment capital at both the central and local levels has shown significant improvement. 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 to overcome in order to improve the efficiency of using these funds.

Ms. Sherman further emphasized: “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 essential services, develop a green economy, improve the quality of human resources, and diversify trade markets. These are fundamental elements that help mitigate global risks and sustain long-term growth.”

A key highlight of this report – themed “Breaking Through the Development of High-Tech Talent in Vietnam” – is the World Bank’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 suggests that Vietnam has significant room to increase spending on research and development (R&D), both from the public and private sectors. Currently, Vietnam's R&D spending remains lower than many countries in the region. Therefore, Vietnam needs to expand its faculty with doctoral degrees, develop outstanding researchers, and strongly promote linkages between universities, businesses, and the government. This will be key to building a workforce ready for the market, promoting technology transfer, and disseminating knowledge.

The Vietnam Economic Update report is a periodic publication released twice a year by the World Bank, providing a comprehensive overview of Vietnam's growth prospects, challenges, and policy recommendations for the medium and long term.

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