International financial institutions optimistic about Vietnam’s 2026 growth

International financial institutions and economic organisations have expressed optimism about Vietnam’s growth prospects in 2026, citing the country’s strong economic performance in 2025 and continued reform momentum despite global uncertainties.

Vietnam recorded a breakthrough year in economic growth in 2025, defying global trade volatility and the prolonged impact of geopolitical tensions.

Official statistics show that the country’s gross domestic product (GDP) expanded by more than 8% last year, well above initial expectations, placing Vietnam among Southeast Asia’s fastest-growing economies and one of the region’s most dynamic performers.

Shantanu Chakraborty, Country Director of the Asian Development Bank (ADB) in Vietnam, described the above-8% growth as evidence of an effective combination of domestic institutional reforms and Vietnam’s ability to capitalise on the global supply chain realignment. He noted that the Government has demonstrated consistent policy management, from accelerating public investment disbursement to gradually refining the legal framework to create more room for private-sector development and the digital economy.

Sharing a similar view, Suan Teck Kin, Executive Director of Executive Director in Global Economics and Markets Research at UOB, said Vietnam has emerged as one of ASEAN’s growth engines, according to VNA.

Vietnam's GDP expands by more than 8% in 2025. (Photo: VNA)

According to UOB’s analysis, industrial production continues to play a pivotal role, helping Vietnam strengthen its position in global value chains. Meanwhile, the clear recovery of domestic consumption and the strong rebound of tourism in 2025 provided additional support to aggregate demand, alongside the leading role of public investment.

Another notable highlight in 2025 was the resilience of Vietnam’s exports amid changes in US trade policy. The country’s total import-export turnover surpassed the 900 billion USD mark for the first time - a historic high and a significant milestone in Vietnam’s international economic integration.

International observers have described this performance as growth amid adversity, reflecting tangible improvements in the competitiveness of Vietnamese goods. Rather than relying solely on low-cost advantages, many Vietnamese enterprises have increasingly met stringent requirements related to green standards, traceability and rules of origin. This has helped mitigate pressure from new technical barriers and tariffs while maintaining access to major and demanding markets.

However, international organisations have also warned of external risks that could affect Vietnam’s growth outlook in 2026. In its Article IV Consultation report released in late 2025, the International Monetary Fund (IMF) noted that part of Vietnam’s recent growth was supported by businesses accelerating exports ahead of the implementation of new tariff measures. As a result, the full impact of rising trade protectionism may become more evident in 2026, posing certain constraints on growth.

From a financial and monetary perspective, Jung Hyo Chang, Director of FX and Derivatives Trading at Shinhan Bank Vietnam, cautioned that external shocks could exert pressure on the exchange rate and short-term capital flows. If foreign exchange reserves are not managed with sufficient flexibility and prudence, Vietnam could face sharp currency fluctuations that may affect investor confidence.

UOB’s Suan Teck Kin also highlighted Vietnam’s high degree of economic openness as a double-edged sword. With exports accounting for around 83% of GDP, the economy benefits greatly when global trade is buoyant, but remains vulnerable to demand slowdowns in key markets such as the US and Europe amid prolonged inflation or tighter monetary policies.

In this context, most international experts agree that sustaining double-digit growth in 2026 and beyond will be challenging, though not unattainable, provided existing growth drivers continue to be strengthened and upgraded.

According to the ADB Country Director, three key pillars could underpin higher growth: structural reforms to improve the business environment and market efficiency; accelerating digital transformation alongside the development of high-quality human resources to harness the advantages of a young, tech-savvy workforce; and attracting high-quality foreign direct investment, particularly in technology, advanced manufacturing and green industries.

These drivers, experts say, will not only support short-term growth but also lay a more solid foundation for sustainable development over the medium and long term.

As Vietnam enters 2026 - the first year of the 2026–2030 socio-economic development plan, international organisations stress that maintaining macroeconomic stability, improving growth quality and staying the course on fundamental reforms will be crucial in turning positive assessments into tangible outcomes and shaping a more sustainable development cycle ahead.

Vietnam’s effective foreign policy earns widespread international recognition: expert

Against the backdrop of deepening global geopolitical polarization in recent years, Vietnam’s foreign policy has proven its effectiveness and earned widespread international recognition.

All major powers within the Group of Seven (G7) and members of the UN Security Council regard the nation as a highly active and valuable partner, according to Professor Vu Minh Khuong of the Lee Kuan Yew School of Public Policy.

In an interview with the Vietnam News Agency's correspondents in Singapore, the Vietnamese scholar noted that over the past five years Vietnam has continuously upgraded its relations to comprehensive strategic partnerships with leading powers, including the US, Japan and Australia. Its growing economic strength, political stability and the proactive vision of its leadership have clearly positioned the country as an influential partner capable of contributing solutions to global challenges.

Vietnam has also performed strongly in forging comprehensive strategic partnerships, particularly with Southeast Asian countries and major powers. Beyond economic integration, the nation has been deeply involved in UN peacekeeping operations and international humanitarian assistance, Khuong noted. This shift in mindset, from “participation” to “proactive contribution,” demonstrates its role as a responsible member of the international community. The professor suggested that in the coming period, Vietnam should focus on value creation, namely addressing pressing global challenges.

He stressed that the country has considerable potential to become a regional anchor for the digital economy in Southeast Asia and beyond, thanks to its strong pool of talent in artificial intelligence (AI) and digital technologies. Khuong recommended Vietnam organize international forums or contribute to major reports to help shape future agendas. In addition, he highlighted the importance of deepening engagement in renewable energy and energy security, particularly green energy, reported VNA.

Professor Vu Minh Khuong of the Lee Kuan Yew School of Public Policy in an interview with the Vietnam News Agency's correspondents in Singapore (Photo: VNA)

With such a broad vision, the professor said, Vietnam would not merely contribute to peacekeeping when called upon, but could emerge as a driving force helping Southeast Asia and itself reach new heights. Defining itself as a developed industrial nation is not only about increasing GDP, but also about contributing to a more prosperous and peaceful region. He recommended that this vision be incorporated into the value framework of the upcoming 14th National Party Congress Resolution.

On culture, the professor observed strong progress, especially at the micro level, in harnessing Vietnam’s cultural “soft power” during the current term. Vietnam’s entertainment industry, he noted, makes greater use of the digital economy than its regional peers. He also emphasised that resolutions on culture demonstrate the country’s commitment to investing in cultural industries.

Over the past five years, despite budgetary pressures caused by the pandemic, social welfare policies and sustainable poverty reduction efforts have continued to be ensured. Beyond reducing poverty, access to electricity, information and infrastructure has improved markedly. These achievements reflect the commendable social responsibility of a socialist state, Khuong commented.

Building on the accomplishments of the Communist Party of Vietnam’s 2020-2025 term, the expert expressed strong confidence that the country can go much further. Although last year presented significant challenges, particularly with the implementation of a two-tier local administrative model and administrative mergers, Vietnam has clearly moved beyond the equilibrium of the old development model, a crucial step towards transformative progress.

He predicted that following the 14th National Party Congress, Hanoi and Ho Chi Minh City would emerge with even greater scale and potential.

Khuong also shared his belief that the nation is capable of achieving a new miracle, one that history will record as a shining chapter of national pride for generations to come.

Vietnam races ahead in GDP growth, closing gap with Southeast Asia’s giants

Vietnam posted 8.02% GDP growth in 2025, among the fastest globally, and is projected to surpass Singapore and Thailand in economic size this decade.

Top 35 global economy by size

According to Vietnam’s General Statistics Office, the country’s 2025 growth rate far outpaced both developed and developing economies in the region and globally.

Vietnam’s GDP at current prices reached an estimated $514 billion in 2025-up $38 billion from $476 billion in 2024.

This figure notably exceeds the $459 billion forecast by the UK-based Center for Economics and Business Research (CEBR).

In its recently released World Economic League Table (WELT) report, CEBR recognized Vietnam for consistently outperforming global averages in GDP growth and ranking among the strongest economies in the Asia-Pacific in recent years.

However, CEBR still classifies Vietnam as a lower-middle-income nation, projecting its 2025 GDP per capita (PPP-adjusted) at around $17,688.

CEBR’s own forecast places Vietnam’s GDP at $459 billion for 2025, up modestly from $450 billion in 2024, maintaining the country’s 34th global ranking-unchanged from 2024 and expected to remain so in 2026.

Malaysia, in comparison, climbs two places to 35th in 2025, just behind Vietnam, and is projected to hold that spot in 2026, cited VNN.

Vietnam recorded a GDP growth rate of over 8% in 2025. Photo: HH

Thailand moves from 30th to 28th place in 2025, ranking six spots above Vietnam but is expected to drop to 29th in 2026.

Singapore, meanwhile, slips from 28th in 2024 to 29th in 2025 and is projected to fall to 30th by 2026.

Indonesia remains the largest Southeast Asian economy, holding 16th place globally in 2024, 17th in 2025, and forecasted to return to 16th in both 2026 and 2030.

When will Vietnam surpass Thailand and Singapore?

According to CEBR, Vietnam’s economic size will continue to grow rapidly in the coming years.

Its GDP is projected to expand at an average annual rate of 5.3% over the next decade.

By 2035, Vietnam is forecast to reach a GDP of $994 billion, ranking 27th globally-surpassing both Thailand and Singapore.

At that time, Singapore’s GDP is expected to reach $864 billion (32nd globally), while Thailand’s is projected at $839 billion (33rd globally).

CEBR further forecasts that these rankings will remain unchanged by 2040, with Vietnam’s GDP climbing to $1.407 trillion.

Indonesia, meanwhile, is expected to leap to 11th globally by 2035 with a GDP of $2.979 trillion and continue rising to 8th by 2040 with a projected GDP of $4.182 trillion.

The Philippines is also on the rise, projected to reach 25th place by 2035 with a GDP of $1.047 trillion, and 24th by 2040 with $1.5 trillion in output.

Vietnam’s path to the top three in Southeast Asia

Vietnam’s ascent will significantly alter the economic rankings in Southeast Asia.

As of 2025, Vietnam ranks fifth in the region by economic size.

CEBR projects that it will climb to third place within the next decade-only behind Indonesia and the Philippines-surpassing both Singapore and Thailand in total GDP.

Other notable projections from CEBR for 2025 include Cambodia with a GDP of $50 billion (96th globally), Laos at $18 billion (135th), Myanmar at $79 billion (84th), the Philippines at $493 billion (33rd), Brunei at $15 billion (141st), and Timor-Leste at $2.1 billion (174th).

Vietnam’s reform drive positions it for regional leadership: Thai scholar

Vietnam’s push to overhaul governance and pursue a technology-driven development path could position the country as a regional leader in Southeast Asia, according to Thai scholar Kavi Chongkittavorn.

Speaking to Bangkok-based VOV correspondents, Chongkittavorn said modern governance should be seen as a core operating system for Vietnam’s next phase of growth, enabling the country to translate ambitious policy goals into tangible economic and social gains.

Vietnam has set out clear long-term objectives, including becoming an upper-middle-income country within the next five years and a developed economy by 2045. The country is also targeting annual economic growth of at least 10% over the next decade, a level few developing economies in ASEAN have openly pursued.

“Vietnam knows exactly what’s a new era and the so-called new rise, because you need a lot of changes within the domestic domain,” said the scholar, noting that achieving them would require coordinated reforms across the economy, legal system and infrastructure.

After three decades as an ASEAN member, Vietnam has established itself as a stabilising force within the bloc, contributing to regional cohesion and unity. Chongkittavorn said Hanoi now appears determined to move beyond that role and help shape ASEAN as a stronger bridge in international relations.

Vietnam’s fast-growing economy gives it the potential to play a more prominent leadership role in ASEAN, particularly if it succeeds in transitioning to a high-tech, green and innovation-led growth model. Its long-term national development goals also align closely with ASEAN’s Vision 2045, creating what Chongkittavorn described as a driving force, cited VOV.

Thai scholar Kavi Chongkittavorn (L) in an interview granted to a Bangkok-based VOV correspondent.

However, he cautioned that the biggest challenge lies not in vision, but in execution. Vietnam will need to maintain discipline in implementation, continue streamlining its state apparatus, empower the private sector and gradually reduce reliance on state-owned enterprises, while accelerating the shift towards a service-based economy.

Building data centers and strengthening digital infrastructure will also be critical over the next decade, as Vietnam advances digital transformation and modern governance, he said.

Chongkittavorn pointed to Vietnam’s handling of the COVID-19 pandemic as evidence of its growing governance capacity. He added that the country’s extensive network of free trade agreements and comprehensive strategic partnerships with major powers gives it an edge over many ASEAN peers.

If Vietnam delivers on its commitments, its development model could become a reference point for other countries, particularly at a time when global economic conditions remain fragile, Chongkittavorn said.

Demonstrating that strong growth can go hand in hand with an open economy would earn Vietnam significant international recognition, he added, stressing that reforms ultimately need to translate into higher living standards and social stability for ordinary citizens.

That foundation, he said, would support long-term partnerships, including ties between Vietnam and Thailand, while contributing to ASEAN’s unity, stability and central role in the region.

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