Even as regional growth shows signs of slowing, the World Bank argues that Vietnam continues to emerge as a prime example of adaptability and the ability to turn challenges into opportunities to drive internal reforms.
The energy shock stemming from the Middle East conflict, coupled with rising trade barriers, global policy instability, and internal economic challenges, is putting significant pressure on the growth momentum of the East Asia-Pacific (EAP) region.
This assessment was made by the World Bank (WB) in its Regional Economic Update report published on April 8th.
However, even as the regional growth landscape shows signs of slowing down, the World Bank argues that Vietnam continues to emerge as a prime example of adaptability and the ability to transform challenges into opportunities to drive internal reforms.
In its latest report, the World Bank forecasts that growth in the East Asia and Asia region will slow from 5% in 2025 to 4.2% in 2026. The main reasons cited are the less favorable global economic environment and the prolonged slowdown in China.
Specifically, China’s growth is estimated to slow from 5% in 2025 to 4.2% in 2026 and 4.3% in 2027. The region’s largest economy continues to face structural challenges, including weakening domestic demand, a sluggish real estate market, and exports pressured by slowing global growth.
For EAP economies outside of China, the World Bank forecasts growth will slow to 4.1% in 2026 before recovering to around 5% in 2027, as geopolitical tensions ease and uncertainty levels decrease.
Specifically for Vietnam, the World Bank forecasts growth rates of 6.3% and 7.7% for 2026 and 2027, respectively – continuing to be the highest in the region. According to the World Bank, the strong growth momentum in 2025 will act as an important “buffer,” helping Vietnam mitigate the impact of global “headwinds.”
This organization highly appreciates Vietnam’s increased investment in infrastructure, education, and institutional quality improvement, which has helped targeted support policies achieve more noticeable results compared to many countries in the region.
Notably, the World Bank had previously estimated that Vietnam could be one of the economies most severely impacted by the new US tariff barriers, with a growth slowdown of up to 1 percentage point. However, actual developments show that Vietnam’s ability to adapt is better than expected.
Aaditya Mattoo, Research Director of the World Bank Group, noted that while some countries in the region are showing signs of stagnation or losing momentum in reforms, Vietnam has emerged as a prime example of proactively reforming to address challenges.
Mr. Mattoo pointed out that the benefits gained from reforms can significantly outweigh the losses caused by trade protectionism. The reality in Vietnam shows that, thanks to reforms being implemented in the service and manufacturing sectors, labor productivity has improved significantly.
Mr. Mattoo stated that instead of focusing solely on concerns about US tariffs or Chinese subsidies, adjusting inappropriate policies has helped Vietnam effectively weather the tariff storm.
In its report, the World Bank also noted that the impact of Middle Eastern conflicts on each country will vary greatly, depending on the degree of dependence on imported energy, internal vulnerabilities, and the ability of governments to flexibly manage policies. Prolonged and escalating conflicts could exacerbate economic difficulties and drag down regional growth.
In a scenario where fuel prices increase by a sustained 50%, household incomes in the region could potentially decrease by 3-4%. Therefore, countries need to implement targeted support measures aimed at vulnerable groups and small and medium-sized enterprises to mitigate negative impacts without placing excessive pressure on budgets.
“Growth in East Asia and the Pacific remains higher than in most other regions of the world, even during periods of instability,” said Carlos Felipe Jaramillo, World Bank Vice President for the region.
“However, sustaining this growth requires countries to address structural challenges and seize the opportunities of the digital age to enhance productivity and create more jobs,” he added.
*Source: Vietnam.vn
