Viet Nam's Economy on Track for Growth Amid Challenges and Green Transition Push

The forecast highlights a resilient economic trajectory, underpinned by recovering exports, steady foreign direct investment (FDI), and increased public spending.

Viet Nam’s economy is projected to maintain strong growth, with real GDP expected to expand by 6.8 percent in 2025 and 6.5 percent in 2026, according to the World Bank’s latest biannual economic report Taking Stock. The forecast highlights a resilient economic trajectory, underpinned by recovering exports, steady foreign direct investment (FDI), and increased public spending.

Economic Growth Drivers and Risks

Economic activity in 2024 has been supported by a rebound in exports, particularly in the technology sector, driven by strong global demand. However, growth momentum is anticipated to slow slightly due to uncertainties in global trade and economic slowdowns among Viet Nam’s major trading partners.

Despite external risks, FDI inflows are expected to remain robust, with an estimated $25 billion in disbursed investments, reflecting Viet Nam’s continued attractiveness to international investors. Additionally, the accelerated recovery of the real estate market—enabled by streamlined project approvals—is set to bolster domestic demand, mitigating some external vulnerabilities.

The World Bank report warns that slower-than-expected global economic growth, disruptions in international trade, and financial sector vulnerabilities could pose challenges to Vietnam’s economic outlook. In response, policymakers are encouraged to leverage public investment, strengthen the financial sector, and enhance energy security to sustain long-term growth.

Strategic Investment in Infrastructure and Energy

To navigate economic uncertainties, the report urges Viet Nam to scale up public investment, particularly in urban, transport, and energy infrastructure. The World Bank emphasizes that efficient government spending will be critical in driving sustainable economic growth while ensuring fiscal stability.

“Viet Nam is projected to maintain robust economic growth over the next two years, but it can use its fiscal space to better prepare for heightened uncertainties,” said Mariam J. Sherman, World Bank Director for Viet Nam, Cambodia, and Lao PDR. “Growth-enhancing public investment, especially in urban, transport, and energy infrastructure, will be critical, provided the authorities can both scale it up and ensure that spending is efficient.”

Green Transition: Viet Nam’s Push for E-Mobility

The report, Electrifying Journeys: E-Mobility Transition in Viet Nam, highlights the importance of transitioning to electric vehicles (EVs) as a key measure in reducing emissions and improving urban air quality.

In 2021, the transport sector accounted for 32.9 million tons of CO2-equivalent emissions, making up 7.2 percent of Viet Nam’s total greenhouse gas emissions. To meet its 2050 net-zero target, Viet Nam must accelerate vehicle electrification, develop EV infrastructure, and ensure a cleaner energy mix.

EV Transition Benefits

According to the World Bank’s projections, the transition to electric vehicles could cut net emissions by 2.2 million tons of CO2-equivalent by 2050, even with the current power grid mix. Additionally, the EV industry has the potential to create up to 6.5 million jobs by 2050, particularly in areas such as battery production and charging infrastructure development.

To support the transition, the report recommends:

• Enforcing strong safety standards for EVs.
• Encouraging high-performance battery adoption.
• Expanding charging and battery-swapping stations.
• Introducing financial incentives to make EVs more affordable.
• Upgrading Viet Nam’s power grid to support the anticipated rise in electricity demand post-2035.

As Viet Nam continues its path toward sustainable development, balancing economic resilience with green transformation will be essential. By investing in infrastructure, fostering innovation, and addressing financial vulnerabilities, Viet Nam is well-positioned to maintain robust growth while leading the region in sustainable transportation.