Vietnam's economy to grow 5.5% in 2024, 6% in 2025: World Bank

A proactive fiscal policy supporting short-term demand, removing barriers to the implementation of public investment, and addressing infrastructure constraints can help the economy achieve these targets and promote long-term growth, according to the World Bank’s latest economic update entitled ‘Making Public Investment Work for Growth’.

The report suggested policy options to get the economy back on track. Effectively implementing the 2023 investment budget can stimulate aggregate demand and economic growth. On exports, the report recommended diversifying product offerings and export destinations to build medium-term resilience against external shocks. At the same time, fiscal policy can play a stronger role in incentivising green practices and consumption, ultimately contributing to environmental sustainability.

The report’s special chapter studied Vietnam’s public investment management and how it can contribute to the goal of climbing the income ladder. To harness the power of public investment, the report recommends that Vietnam sustain its level of investment, improve the quality of the proposed project, and address deficiencies in public investment management and inter-governmental fiscal institutions.

“Vietnam’s economy is being tested by internal and external factors. To boost economic growth, the government can support aggregate demand through effective public investments, thereby creating jobs, and stimulating economic activity,” said Carolyn Turk, World Bank country director for Vietnam. “Beyond short-term support measures, the government should not lose sight of structural institutional reforms—including in the energy and banking sectors—as they are imperative for long-term growth.”

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