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Viet Nam’s economic growth has outperformed peers
Source: World Bank, World Development Indicators database.
Poverty has declined amid strong growth
Note: The poverty rate measures the share of the population with income below USD 2.15 per day at 2017 purchasing power parities, which corrects for differences in price levels
countries and time.
Viet Nam is a very open economy
Source: OECD, Economic Outlook database; World Bank, World Development Indicators database; and CEIC.
Reaching ambitious growth targets will require further boosting productivity
Note: Gross national income per capita is expressed in USD using the Atlas Method, which keeps the income classification thresholds fixed in real terms. The World Bank’s high-income threshold is set at a gross national income per capita of USD 13 845 in 2022.
Source: World Bank, Gross national income per capita, Atlas method.
Growth is projected to remain strong
Source: OECD projections.
Strengthening macroeconomic policies
Inflation has been contained
Stronger insolvency procedures could reduce high shares of non-performing loans
2025,
Note: Data point for first quarter of 2025 is end of 2024 for Viet Nam. EME is the unweighted average of Asian emerging market economies (China, India, Indonesia, Malaysia, the Philippines, Thailand and Viet Nam).
Source: CEIC.
Public debt is low but spending pressures are rising
Public debt trajectories under different scenarios
Note: Nominal GDP and real GDP are assumed to grow by 8.5% and 5.6%, respectively, after 2027, based on their historical averages. The interest rate is constant at 3.1%. Given the lack of recent data, it is assumed that the share of public social expenditures in GDP was constant from 2017 to 2023. All scenarios assume that public social expenditure will reach 10% of GDP by 2060, while other expenditures increase by 3% of GDP. The current policies scenario assumes that revenues as a share of GDP will converge to their historical average. The fiscal consolidation scenario assumes that tax revenues rise gradually over time, reaching an additional 6.7% of GDP by 2060. The higher growth scenario assumes that growth-enhancing structural reforms increase GDP growth by approximately 0.6 percentage points per year, reaching a 20% higher GDP level by 2060.
Source: OECD calculations.
There is scope for tax reform, including by reducing tax expenditures in personal income tax and value-added tax
Tax revenue by source as a percentage of total tax revenue, 2022
Source: OECD Global Revenue database.
Harnessing trade and investment flows to boost productivity
Foreign direct investment has been a driver of growth
Firms that participate in international trade and global value chains are more productive
Relative productivity of different groups of firms
Note: Productivity and wage premiums are measured relative to domestically-owned firms operating in the domestic market (not engaged in imports or exports) after controlling for firm size and sectoral differences.
Source: World Bank (2024), Viet Nam 2045: Trading up in a Changing World – Pathways to a High-Income Future.
Restrictions on foreign direct investment could be reduced,
especially in services sectors
Foreign Direct Investment Regulatory Restrictiveness Index, 2023
Note: The OECD Foreign Direct Investment Regulatory Restrictiveness Index ranges between 0 and 1 and covers only statutory measures discriminating against foreign investors (for example foreign equity limits, screening and approval procedures, restrictions on key foreign personnel, and other operational measures).
Source: OECD Foreign Direct Investment Regulatory Restrictiveness Index, 2023.
Levelling the playing field between state-owned enterprises and private-sector firms would strengthen competition
Note: Based on the 2018 vintage of the OECD Product Market Regulation (PMR) indicators. Information used to calculate the 2018 PMR indicators is based on laws and regulations in place on 1 January 2018 or a later year depending on when the information was provided by the relevant country (1 January 2022 for Viet Nam).
Source: OECD, Product Market Regulation database and OECD-World Bank Group, Product Market Regulation database.
Better protection of intellectual property rights could strengthen links between
foreign and domestic firms
Note: The OECD average consists of 24 OECD countries.
Source: US Chamber of Commerce (2024), International Intellectual Property Index, 2024 Twelfth Edition.
Investing in skills is key for productivity
Access to upper secondary education could be improved further
Source: General Statistics Office of Viet Nam.
Improving opportunities in the labour market
Rapid population ageing requires stronger social protection
Note: The old-age dependency ratio is defined as the number of persons aged 65 and over relative to the 15-64 years old population. Source: United Nations, World Population Prospects 2022; World Bank, World Development Indicators database.
Barriers to formal employment should be reduced
Note: Informality follows the definition applied by the International Labour Organisation (https://www.ilo.org/media/5481/download).
Source: International Labour Organization; Ghorpade et al. (2024) for Malaysia; National Statistical Office (NSO) for Thailand.
Malaysia (2022) Thailand (2023) Viet Nam (2023) Myanmar (2020) Cambodia (2019)
Unlocking low-carbon economic growth
Viet Nam’s ambitious climate mitigation targets call for further policy efforts
Greenhouse gas emissions, millions of tonnes of carbon dioxide equivalent
Historical data
Planned emissions reduction scenario
Business as usual Projections
Source: Crippa et al. (2024) for historical data; Viet Nam’s Nationally Determined Contribution (NDC) official objectives for 2025 and 2030 (update 2022), linear extrapolation to net zero thereafter. In its NDC, Viet Nam has committed to an unconditional reduction of 15.8% of greenhouse gas emissions by 2030 compared to the business-as-usual scenario, and a reduction of 43.5% conditional on receiving international support in the form of financial aid, technology transfer and capacity building.
Fossil fuel consumption should be reduced, including by restoring the environmental protection tax
Source: Energy Institute – Statistical Review of World Energy (2024).
Replacing coal-fired power with renewables would curb CO2 emissions despite rising electricity demand
Note: Data refer to the first 10 months of each year.
Source: Ember data.
Viet Nam has considerable renewable energy potential
Source: Electricity and Renewable Energy Authority in Viet Nam; Danish Energy Agency (2024): Viet Nam Energy Outlook Report.
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Disclaimers:
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