Mariam J. Sherman, World Bank Division Director for Việt Nam, Cambodia, and Lao PDR, speaks at the event. — VNS Photo

HÀ NỘI — Việt Nam’s economy remains resilient but sustained reforms are key to navigating heightened uncertainty, the World Bank said on Friday.

At the launch of the Việt Nam Economic Update May 2026 edition held in Hà Nội, the World Bank said that Việt Nam entered 2026 in the strongest position of any economy in ASEAN.

Despite global trade headwinds, gross domestic product (GDP) growth accelerated to 8 per cent in 2025 - the fastest in ASEAN - with momentum carrying through to 2026, buoyed by surging exports and investment, a resilient domestic economy and sweeping reform agenda amidst the largest administrative rationalisation and reorganisation since the Đổi Mới (Renewal) reforms.

"Although global headwinds will temper the pace of growth, the outlook for Việt Nam’s economy in 2026 remains solid. Growth is expected to moderate to a still high 6.8 per cent in 2026 as the Middle East oil shock weighs on global demand and domestic activity," the report states.

On the domestic side, an investment-led fiscal expansion is expected to support private sector activity and consumption. With public debt at only 34 per cent of GDP in 2025, there is meaningful fiscal space to increase spending and absorb shocks.

With higher global energy prices expected to persist through the year, inflation is projected to average just over 4 per cent in 2026.

The medium-term outlook is anchored by a far-reaching capital market and structural reform agenda alongside a US$320 billion public infrastructure investment plan.

The report notes that while Việt Nam’s outlook remains solid, risks remain elevated in the near term. Although manufacturing and exports will continue to anchor growth, the economy’s ability to retain more value domestically, deepen linkages between foreign-invested and domestic firms and raise productivity will be critical for sustaining momentum over the medium term.

Mariam J. Sherman, World Bank Division Director for Việt Nam, Cambodia and Lao PDR, said: “Softer global conditions are making Việt Nam's external environment more challenging, with the oil shock adding to downside risks. At the same time, climate shocks, rapid technological change, demographic shifts and rising infrastructure needs are reshaping the foundations of long-term growth.

“This calls for further strengthening macroeconomic management while accelerating reforms. The real test will be to implement, finance and sustain the ambitious reform agenda now underway, while managing external risks and domestic vulnerabilities and unlocking the full potential of the domestic private sector to create more and better jobs.”

The report highlights that while Việt Nam’s reform agenda is moving in the right direction, translating reforms into results, ensuring that investments are productive, financing is adequate and reform implementation keeps pace with ambition, requires sustained efforts. Done well, these efforts can help Việt Nam build a virtuous cycle of investor confidence, private investment, growth and resilience, while making credible progress towards high-income status.

The Việt Nam Economic Update is a biannual report assessing recent economic developments, the outlook and selected policy priorities. — BIZHUB/VNS