Vietnam’s economic growth is projected to slow to 6.8% this year, down from an 8% expansion in the previous year. According to Mariam J. Sherman, World Bank Country Director for Vietnam, the nation’s medium-term outlook remains robust, but near-term risks are elevated.
“Softer global conditions are making Vietnam’s external environment more challenging, with the oil shock adding to downside risks,” Sherman said, as reported by Reuters.
Vietnam’s banking sector is experiencing funding pressures, as credit growth continues to outpace deposit mobilisation. The country has set an ambitious target of at least 10% annual GDP growth for this year and for the remainder of the decade.
However, inflationary pressures are mounting, driven in part by the impact of the conflict in the Middle East, which has pushed up oil prices. Vietnam’s annual inflation rate accelerated to 5.46% in April, the highest level since January 2020 and above the government’s 4.5% target. Looking ahead, the World Bank forecasts Vietnam’s inflation at 4.2% in 2026.
