Vietnam has been a development success story. Economic reforms since the launch of Đổi Mới in 1986, coupled with beneficial global trends, have helped propel Vietnam from being one of the world’s poorest nations to a middle-income economy in one generation.GDP per capita increased 6-fold in less than 40 years, from less than $600 per person in 1986 to almost US$3,700 (constant 2015 US$). Poverty rates (US$3.65/day, 2017 PPP) declined from 14 in 2010 to 4.2 percent in 2022.
Thanks to its solid foundations, the economy has proven resilient through different crises. Economic growth is projected to reach 5.5 per cent in 2024, up from five percent in 2023, driven by increasing global demand and restored domestic consumer confidence. Real GDP growth is expected to strengthen in the next three years, reaching the pre-pandemic average by 2026.
Growing at 2.5 to 3.5 percent per year over the past three decades, the agriculture sector has supported economic growth and ensured food security. It contributed 13 percent of GDP and 29 percent of employment in 2021.
Health outcomes have improved along with rising living standards. Infant mortality rates fell from 32.6 per 1,000 live births in 1993 to 16.7 in 2020. Life expectancy rose from 70.5 to 75.5 years between 1990 and 2020. Vietnam’s universal health coverage index is at 73—higher than regional and global averages—with 87 percent of the population covered by the national health insurance scheme.
Vietnam’s average duration of (learning-adjusted) schooling is 10.2 years, second only to Singapore among the Association of Southeast Asian Nations (ASEAN) countries. Its human capital index is 0.69 out of a maximum of one, the highest among lower middle-income economies.
Access to infrastructure services has increased dramatically. As of 2019, 99.4 percent of the population used electricity as their main source of lighting, up from just 14 percent in 1993. Access to clean water in rural areas has also improved—up from 17 percent in 1993 to 51 percent in 2020.
Vietnam has grown bolder in its development aspirations, aiming to become a high-income country by 2045.To achieve this goal, the economy would have to grow at an annual average rate of about six percent per capita for the next 25 years. Viet Nam also aims to grow in a greener, more inclusive way. At COP27, it pledged to reduce methane emissions by 30 percent and halting deforestation by 2030 while achieving net zero carbon emissions by 2050. To achieve these targets, Viet Nam unveiled the "One Million Hectares of High-Quality Low-Emission Rice" Program at COP28. The World Bank is actively collaborating with Viet Nam on this program's design and implementation.
A few megatrends are shaping the future of Vietnam. The country’s population is rapidly aging and global trade is declining. Environmental degradation, climate change, and the rise of automation are growing. The impacts of the COVID-19 crisis presented unprecedented challenges that might undermine progress towards development goals.
To rise to these challenges, Vietnam needs to dramatically improve its performance to implement policies particularly in finance, environment, digital transformation, poverty/social protection, and low-carbon infrastructure. Adapting to climate impacts and pursuing a growth strategy that steers the economy away from carbon-intensive production will help the country achieve its climate objectives while expanding its GDP per capita by around six percent a year – the average rate needed to become a high-income country by 2045.
Last Updated:Apr 19, 2024
