Vietnam's GDP growth forecast for 2025 remains strong despite potential challenges

Vietnam's GDP growth forecast for 2025 remains strong despite potential challenges
Banking & Financial Services
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Ajay Banga 14th President of the World Bank Group | Official Website

Vietnam's economic prospects for 2025 are buoyant, with GDP growth anticipated to reach 6.8 percent. This projection mirrors the 2024 estimate and will slightly decrease to 6.5 percent in 2026. The export rebound in 2024 is a significant factor contributing to the expected growth in 2025. However, this momentum may slow down in 2026 due to economic deceleration in key trade partners such as China and the United States and uncertainties in global trade policy changes.

The overall outlook for Vietnam is positive, though not without challenges. Given its integration into the global economy, Vietnam faces risks from potential global trade disruptions and slower economic growth in major markets. Such developments could influence Vietnam's manufacturing exports, industrial production, and growth trajectory. On the domestic front, an increase in public investment could help boost demand and support economic growth, with the real estate market recovery potentially enhancing domestic consumption.

Policy recommendations to support continued economic growth emphasize broadening public investments, managing financial sector risks, enhancing energy resilience, and implementing structural reforms. The focus should be on investments in energy, logistics, and transport. Financial reforms are also essential to address risks, improve bank capital, and enhance supervision. Strengthening energy resilience through the National Energy Efficiency Plan and timely development of generation capacity is imperative. Additionally, structural reforms such as regulatory changes, fostering human capital, and increasing trade integration are crucial for long-term growth.

In energy and environmental goals, Vietnam aims for significant decarbonization by 2050. At the 2021 United Nations Climate Change Conference, the Prime Minister committed to achieving net zero emissions by 2050, spurring efforts to reduce transportation emissions.

With transport being a major greenhouse gas emitter, Vietnam plans to transition towards electric vehicles (EVs). This includes the shift of the dominant two-wheeler segment to electric options. By 2022, two-wheelers made up 94 percent of registered vehicles in Vietnam, and a robust market for EVs, including cars and two-wheelers, is expected to develop.

The transition to e-mobility is anticipated to stimulate growth in the EV value chain, including vehicle and battery production and charging infrastructure, while generating up to 6.5 million jobs by 2050. Vietnam targets having 50% of urban vehicles powered by electricity or green energy by 2030 and full electrification by 2050.

Recommendations for Vietnam's e-mobility transition include creating a cross-ministerial body to oversee the transition, promoting EV adoption through incentives and infrastructure development, and preparing the power sector to meet EV demand by integrating EV impacts into power plans and promoting smart charging solutions.