In its March, Taking Stock report, the World Bank has said it foresees GDP growth for Vietnam of 6.8 percent in 2025 falling to just 6.5 percent growth in 2026. This, the report suggests, will be in line with economic slowdowns in major trading partners (China and the US) and uncertain global trade policies.
It also comes after Vietnam’s government set a GDP growth target for the year of 8 percent looking to reach double digit growth in subsequent years. (See also: Vietnam’s 8 Percent GDP Growth Target: Unpacked).
Key takeaways from the report:
- Viet Nam’s GDP growth forecast to moderate to 6.8 percent in 2025 and 6.5 percent in 2026 due to Export recovery in 2024 expected to ease gradually in 2025–26 because of reduced demand from China and the US.
- Domestic economic activities and services projected to strengthen through 2025–26, driven by a recovering real estate market.
- Inflation expected to remain stable at around 3.5 percent over 2025–26, below the target range of 4.5–5 percent.
- Minimal inflationary impact expected from public sector downsizing due to the small public sector workforce (3.8 percent of total employment).
- Current account projected to maintain a surplus due to strong merchandise trade balance and stable foreign direct investment inflows.
- Fiscal deficit expected to return (1.4 percent of GDP in 2025, narrowing to 1.0 percent in 2026) from increased government expenditure on infrastructure projects and public sector wages.
- Key downside risks include slower-than-expected global growth, trade disruptions affecting exports, delayed recovery in real estate, weakened bank asset quality, and vulnerability to climate-related events.
- Potential upside includes stronger export demand from higher-than-expected growth in the US and EU, easing pressure on the US/VND exchange rate, increased public investments, and faster real estate market recovery.