This outlook reflects information available as of April 10, 2025.
1 2
VIET NAM
Population Poverty
million millions living on less than $3.65/day
101.0 4.2
3 4
Life expectancy at birth School enrollment
After real GDP growth of 7.1 percent in 2024, GDP growth years primary (% gross)
is projected to slow to 5.8 percent in 2025 given increased
uncertainties due to recent trade policy shifts and a pro-
74.6 122.5
5 6
jected slowdown of global growth. The share of the popu- GDP GDP per capita
lation living on less than $3.65 per day is expected to current US$, billion current US$
decline to 3.6 percent.
462.1 4576.2
Sources: WDI, MFMod, and official data. 1/ 2024. 2/ 2022 (2017 PPPs). 3/ 2022.
4/ 2023. 5/ 2024. 6/ 2024.
demand in 2024 led to the recovery of manufacturing and ser-
Key conditions and challenges vices exports from a contraction in 2023. The real estate sector
showed signs of improvement, contributing to recovery of private
As a trade-oriented economy (imports and exports represent al- domestic investment, as the supply of newly licensed property
most 170 percent of GDP), Viet Nam is particularly exposed to projects and apartment units picked up in 2024 while more at-
ongoing shifts in global trade policies and associated uncertainty tractive mortgage rates for new loans increased demand.
which would impact exports, investment, and growth. The US re-
mains the largest export destination of Viet Nam, accounting for Amid higher growth, labor market conditions improved. Manu-
30 percent of total exports, compared to 15 percent to China, 13 facturing employment growth strengthened to 3.4 percent (y/
percent to the EU and 8 percent to ASEAN countries, while China y) by November 2024 from -2.3 percent a year earlier. Real in-
accounts for 38 percent of its imports. Uncertainty may also further come grew by 4.8 percent compared to 1.3 percent in 2023,
weaken consumer confidence and spending which has lagged GDP due to improved labor market conditions and public sector
growth in recent years. Meanwhile, financial sector vulnerabilities wage hikes. However, income growth has not fully translated
persist with the average loan-loss coverage ratio among 26 banks at into private consumption, and gross savings rate remains high
83 percent compared to 150 percent in 2022. While the government at 37.2 percent in 2024. Headline inflation inched up to 3.6
has fiscal space to support demand, effective implementation may be percent in 2024 compared to 3.3 percent in 2023, well below
hampered by chronic under-disbursement in public investment. the State Bank of Viet Nam (SBV) target of 4-4.5 percent, dri-
ven by food, transport, and administered prices for health and
education. Core inflation remained subdued at 2.7 percent for
Recent developments the year. Strong GDP growth, easing inflation, and improved
labor market conditions in 2024 are expected to have con-
GDP growth accelerated from 5.1 percent in 2023 to 7.1 percent tributed to poverty reduction. The poverty rate declined from
in 2024, buoyed by a strong rebound in exports. Higher external 4.0 to 3.8 percent (lower middle-income country line), driven
FIGURE 1 / Real GDP growth and contributions to real GDP growth FIGURE 2 / Actual and projected poverty rates and real GDP per
capita
Percent, percentage points Poverty rate (%) Real GDP per capita (constant million LCU)
10 90 80
8 80 70
6 70 60
60
4 50
50
2 40
40
0 30
30
-2 20 20
-4 10 10
2017 2018 2019 2020 2021 2022 2023 2024 2025f 2026f 2027f 0 0
Gov. cons. GFCF Inventories 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026
Private cons. Net exports Statistical disc. International poverty rate Lower middle-income pov. rate
GDP Upper middle-income pov. rate Real GDP pc
Sources: Viet Nam’s General Statistics Office and World Bank staff estimates. Source: World Bank. Notes: See footnotes in table on the next page.
1 Macro Poverty Outlook / April 2025
This outlook reflects information available as of April 10, 2025.
by real income growth. However, lower growth in the agriculture transactions have remained limited, they are expected to recover
sector suggests more limited gains among the poorest. in 2025-26. Headline inflation is set to remain within target of 4.5-5
percent as oil and commodity prices are projected to continue eas-
Viet Nam’s external position deteriorated with the current account ing. The projected economic growth augurs well for poverty reduc-
surplus being offset by financial outflows and large unrecorded tion efforts in the country. Nevertheless, external economic uncer-
capital outflows amid continued interest rate differentials. Further, tainties pose risks that could lead to job losses among unskilled
global strengthening of the US dollar added pressure on the local workers and might put in jeopardy some of the recent gains in
currency. In response, the SBV intervened by drawing down cur- poverty reduction.
rent reserves to about 2.5 months of imports by Q3-2024 while
withdrawing liquidity through OMOs and issuance of T-bills. This outlook is subject to increasing downside risks, particularly
on the external side. These include challenges from adverse trade
Credit growth improved during 2024, reaching the government’s policy shifts, slower-than-expected global growth, and global policy
target of 15 percent by the end of the year, driven by credit to the uncertainty. Given the country’s exposure to the external environ-
wholesale and retail trade, manufacturing, and real estate sectors. ment, stronger-than-expected distortions in trade policy could ad-
However, non-performing loans have remained at 4.6 percent by versely impact exports and growth. A slower-than-expected glob-
September 2024, while the average loan-loss coverage ratio among al growth could also reduce external demand and affect exports
26 banks declined to 83 percent in Q3–2024, well below the peak and private investments including FDI. Further, higher-than-expect-
of 151 percent in 2022. ed policy uncertainty could weigh down on investment and growth.
Reduced recurrent expenditures, under-disbursement of public Policy measures should focus on expanding public investment,
investment and higher than planned revenue collection led to mitigating fiscal sector risks, and structural reforms. While space
fiscal tightening in 2024, with the fiscal account registering an for monetary policy intervention remains restrained, fiscal policy
estimated surplus of 1.8 percent of GDP. Execution of public in- could still support growth especially through investment to close
vestment was constrained by regulatory and land clearance de- emerging infrastructure gaps. Building on recent reforms, such
lays while the government continued its planned annual savings as the revision of Law on Credit institutions, further steps to
in recurrent expenditures. mitigate financial sector risks and vulnerabilities remain crucial
to promote financial sector resilience and stability. Accelerating
structural reforms to strengthen the regulatory environment in
Outlook critical backbone services (information and communication tech-
nology, electricity, transport), to green the economy, build human
Viet Nam’s GDP growth is forecast to moderate to 5.8 percent in capital, and improve the business environment are crucial to sus-
2025 due to increased trade policy uncertainty. While real estate tain long-term growth.
Recent history and projections 2022 2023 2024e 2025f 2026f 2027f
Real GDP growth, at constant market prices 8.5 5.1 7.1 5.8 6.1 6.4
Private consumption 7.9 3.4 6.6 6.3 7.0 7.0
Government consumption 3.0 4.6 4.0 5.5 4.9 2.5
Gross fixed capital investment 5.9 4.6 7.3 6.1 7.5 7.7
Exports, goods and services 6.2 -2.5 15.5 6.2 8.7 9.0
Imports, goods and services 3.5 -4.5 16.1 6.8 9.5 9.5
Real GDP growth, at constant factor prices 8.8 5.3 7.3 5.9 6.0 6.3
Agriculture 3.7 3.9 2.7 3.0 3.0 3.0
Industry 8.2 3.7 9.1 6.0 6.5 6.5
Services 10.7 6.9 6.9 6.4 6.2 6.8
Employment rate (% of working-age population, 15 years+) 72.0 71.8 71.6 71.5 71.3 71.0
Inflation (consumer price index) 3.1 3.2 3.5 3.5 3.5 3.5
Current account balance (% of GDP) 0.3 6.0 1.9 1.6 1.7 2.1
Net foreign direct investment inflow (% of GDP) 3.7 4.6 4.4 4.3 4.3 3.9
Fiscal balance (% of GDP) 0.7 -2.3 1.8 -2.2 -1.8 -1.6
Revenues (% of GDP) 18.9 17.0 18.4 16.4 16.2 16.0
Debt (% of GDP) 36.9 36.6 37.5 36.9 35.0 33.8
Primary balance (% of GDP) 1.7 -1.5 2.7 -1.2 -0.8 -0.6
1,2
International poverty rate ($2.15 in 2017 PPP) 1.0 0.9 0.9 0.9 0.8 0.8
1,2
Lower middle-income poverty rate ($3.65 in 2017 PPP) 4.2 4.0 3.8 3.6 3.4 3.2
1,2
Upper middle-income poverty rate ($6.85 in 2017 PPP) 19.7 19.1 18.2 17.5 16.8 16.1
GHG emissions growth (mtCO2e) 6.1 4.4 6.1 5.0 5.3 5.4
Source: World Bank, Poverty and Economic Policy Global Departments. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast. Data in annual percent change unless indicated otherwise.
1/ Calculations based on EAPPOV harmonization, using 2016-VHLSS and 2022-VHLSS. Actual data: 2022. Nowcast: 2023-2024. Forecasts are from 2025 to 2027.
2/ Projection using annualized elasticity (2016-2022) with pass-through = 0.7 based on GDP per capita in constant LCU.
Macro Poverty Outlook / April 2025 2
