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The WB’s East Asia and Pacific Economic Update released for October projected that the bloc’s overall expansion will ease to 4.8% in 2025 from last year’s 5%, then slip further to 4.3% nest year as trade barriers, geopolitical uncertainties and reliance on fiscal stimulus weigh on momentum. Even so, the region remains a global bright spot, buoyed by resilience and ample room for structural reform.

Strong recovery underpins Vietnam’s outlook

Vietnam’s edge stems from a sharp manufacturing rebound and consumer spending surge, backed by effective macroeconomic management, tamed inflation, and post-pandemic aid for companies.

At a press briefing on Monday, Aaditya Mattoo, WB’s Chief Economist for East Asia and the Pacific, stressed that around 80% of Vietnam’s new jobs come from young and dynamic firms, a positive sign of private sector vitality. Still, he flagged a recent dip in such firms’ shares, pointing to entrenched structural and regulatory hurdles.

Vietnam has made progress in specializing its industry and services, especially in higher value-added segments. However, Mattoo noted that institutional reforms and productivity gains are essential to fully capitalize on shifts in the global supply chain.

According to him, the “China +1” strategy offers big opportunities for attracting investment, but Vietnam’s integration into regional production networks remains modest. Stronger economic governance reforms and productivity improvements will prove crucial to grab those opportunities.

External headwinds, domestic priorities

The report also spotlighted impact from the new U.S. tariffs on export-heavy regional players. For Vietnam, Mattoo said countermeasures should go beyond export diversification to strengthen domestic demand and boost value-added production.

Speeding up digital transformation, improving governance capacity, and promoting innovation in the private sector are core drivers for the coming phase of growth. Raising labor productivity is essential for a quality-driven growth model focused on higher value-added industries.

Institutional reforms, innovation, and workforce upskilling, according to WB, will not only sustain Vietnam’s high growth rate but also elevate the quality of growth, advancing toward more inclusive and sustainable growth.