GDP growth forecast. Photo: World Bank

Vietnam's growth potential

Vietnam's GDP growth remains the same as the 2024 Economic Outlook that the World Bank announced earlier this year, stating that Vietnam's economic growth in 2024 will be 5.5%, and 6% in 2025.

Vietnam continues to be in the top group in the world in terms of economic growth rate.

"The destination of China Plus One is Vietnam. Accordingly, Vietnam can attract huge investment. Therefore, Vietnam should not be satisfied with the GDP growth figure of 5.5% as a country with great growth potential," Aaditya Mattoo said.

Aaditya Mattoo analyzed that Vietnam is a country with great potential, among the countries with high growth rates.

Vietnam has a GDP of 5.5%, which is better than many other countries. However, this number is not suitable for a country like Vietnam.

"Economic growth of 5.5% is poor compared to Vietnam's potential. Vietnam should not be satisfied with this number," Aaditya Mattoo said.

Dorsati Madani, senior economist of the World Bank (WB) in Vietnam, said FDI capital flows to Vietnam are growing well.

This is a sign of the attractiveness of the Vietnamese economy to foreign direct investment. The Government's promotion of public investment will help support aggregate demand and promote economic recovery.

She said that in the future, unless another major crisis occurs in the world, the World Bank forecasts that Vietnam's economy in 2025 will have a growth rate of 6%, then 6.5% in 2026.

Therefore, the future recovery is positive. Even in a positive scenario, if the growth rate of the US and EU is higher than expected, it is likely that the growth rate in Vietnam will also increase.

Asia is forecast to grow 4.6% in 2024

In its annual semi-annual economic outlook for the region, the World Bank said developing countries in the East Asia and Pacific region are growing faster than the rest of the world, but slower than before the pandemic.

While recovering global trade and easing financial conditions will support the region's economies, growing protectionism and policy uncertainty will slow growth.

According to the report, regional growth is expected to slow to 4.5% in 2024 from 5.1% last year.

Growth in developing countries in East Asia and the Pacific, excluding China, is forecast to increase to 4.6% this year, from 4.4% in 2023.

Growth in China is forecast to slow to 4.5% from 5.2% in 2023 as high debt, a weak real estate sector and trade conflicts weigh on the economy.

Among Pacific Island countries, growth is forecast to slow to 3.6% in 2024 from 5.6% last year.

The slowdown partly reflects the normalization of growth in Fiji to 3.5% in 2024 from an exceptionally strong 8% last year.

Photo: Trong Hieu

World Bank Regional Vice President for East Asia and Pacific Manuela V. Ferro said "The East Asia and Pacific region is contributing strongly to world economic growth, even as it faces a more challenging and uncertain global environment, an aging population and the impacts of climate change.

Countries in the region can maintain growth momentum by accelerating the opening up of activities to private sector investment, addressing financial sector challenges and increasing productivity."

The outlook is subject to downside risks, including a larger-than-expected slowdown in the global economy, higher interest rates in major economies, increased uncertainty around the world about economic policies, and geopolitical tensions.

"Per capita income growth in the East Asia and Pacific region has surpassed that of most other developing economies in recent decades.

However, it is driven by investment rather than productivity growth. Bold policy action to unleash competition, improve infrastructure and reform education can revitalize the regional economy," said Aaditya Mattoo.

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