VNExpress/VNA-Apr 25
Vietnam’s gross domestic product (GDP) growth is forecast to moderate to 5.8% in 2025 due to increased trade policy uncertainty, according to the World Bank (WB)’s latest East Asia and Pacific Economic Update. As a trade-oriented economy, with imports and exports representing almost 170% of the GDP, Vietnam is particularly exposed to ongoing shifts in global trade policies. The U.S. remains the largest export destination of Vietnam, accounting for 30% of its total exports, while China makes up 38% of its imports. Uncertainty may also further weaken consumer confidence and spending which has lagged GDP growth in recent years, the WB said, highlighting financial sector vulnerabilities persist with the average loan-loss coverage ratio among 26 banks at 83% compared to 150% in 2022. While the Government has fiscal space to support demand, effective implementation may be hampered by chronic under-disbursement in public investment. The bank stated that given the country’s exposure to the external environment, stronger-than-expected distortions in trade policy could adversely impact exports and growth. A slower-than-expected global growth could also reduce external demand and affect exports and private investments including FDI. Despite these challenges, poverty rates in Vietnam continue their downward trend. The share of the population living on less than $3.65 per day (the lower-middle-income poverty line) is expected to decline from 3.8% in 2024 to 3.6% this year. However, lower growth in the agriculture sector suggests more limited gains among the poorest. Experts said policy measures should focus on expanding public investment, mitigating fiscal sector risks, and structural reforms. While space for monetary policy intervention remains restrained, fiscal policy could still support growth especially through investment to close emerging infrastructure gaps. Read more at: https://e.vnexpress.net/news/business/economy/world-bank-forecasts-vietnam-gdp-growth-at-5-8-in-2025-4878731.html
