WB revises down Vietnam’s 2025 GDP forecast to 5.8%

HCMC – The World Bank (WB) has lowered Vietnam’s 2025 GDP growth forecast to 5.8% from its projection of 6.8% released in March, though the figure still outpaces the East Asia-Pacific regional average of 4%.

The bank’s East Asia and Pacific Economic Update report, released in April 2025, indicates that Vietnam’s economy has rebounded strongly after a subdued 2023, driven by rising external demand, which boosted exports of goods and services by 15.5% in 2024.

Vietnam’s real estate market has shown signs of recovery, supported by more favorable home loan interest rates and increased availability of new projects, boosting domestic private investment.

These positive developments have improved the labor market, with employment in the manufacturing sector rising by 3.4% in November 2024, reversing a 2.3% decline recorded in the same period of the previous year.

Real incomes rose by 4.8% in 2024, compared to 1.3% in 2023, driven by an improved labor market and higher public-sector salaries. However, domestic consumption growth remained subdued due to a persistently high savings rate of 37.2% in 2024.

According to the World Bank, Vietnam, with total trade turnover accounting for nearly 170% of GDP, remains vulnerable to global trade fluctuations. Amid rising uncertainty, consumer confidence may continue to decline, resulting in subdued spending.

Financial risks persist, while slow public investment disbursement could hamper stimulus efforts despite available fiscal space. External factors, such as changes in trade policy, slower global growth, and policy uncertainty, could affect exports and reduce investment inflows, including foreign direct investment (FDI).

Experts recommend accelerating public investment to address infrastructure bottlenecks while managing fiscal risks and advancing structural reforms. Although monetary policy space is limited, fiscal policy remains a key tool to support economic growth.

The World Bank also projects that Vietnam’s medium-term growth prospects remain positive, with GDP forecast to reach 6.1% in 2026 and 6.4% in 2027. Achieving these targets will require a more stable international environment as well as accelerated domestic reforms, higher productivity, greater investment in human capital, and progress toward a greener economy.

Gia Nghi

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