Vietnam GDP growth projected at 5.8% in 2025, 6.1% in 2026: World Bank

The bank predicted that Vietnam's medium-term growth outlook remains positive, with GDP growth estimated to rebound to 6.1 per cent in 2026 and 6.4 per cent in 2027.

The United States is the largest export destination of the country, accounting for 30 per cent of its total exports, while China comprises 38 per cent of its imports.

Uncertainty may also further weaken consumer confidence and spending, which has lagged GDP growth in recent years, the World Bank said, highlighting financial sector vulnerabilities persist with the average loan-loss coverage ratio among 26 banks at 83 per cent compared to 150 per cent in 2022.

While the government has fiscal space to support demand, effective implementation may be hampered by chronic under-disbursement in public investment.

Keeping in view the country’s exposure to the external environment, stronger-than-expected distortions in trade policy could adversely affect exports and growth, the bank noted.

A slower-than-expected global growth could also reduce external demand and affect exports and private investments, including foreign direct investment (FDI).

Despite these challenges, poverty rates in Vietnam continue their downward trend. The share of the population living on less than $3.65 per day (the lower-middle-income poverty line) is expected to decline from 3.8 per cent in 2024 to 3.6 per cent this year.

However, lower growth in the agriculture sector suggests more limited gains among the poorest.

Fibre2Fashion News Desk (DS)