Vietnam Achieves Upper-Middle-Income Status, Eyes Further Growth

Vietnam has officially been classified as an upper-middle-income country by the World Bank, with its gross national income (GNI) per capita rising from $4,490 in 2024 to $4,970 in 2025. This increase surpasses the threshold of $4,636 required for this classification, reflecting the nation's strong economic performance bolstered by a significant rise in exports, which grew by over 15% in both 2024 and 2025. The country's GDP is projected to grow by 7% and 8% in these respective years, according to the World Bank's statement.

Between 2021 and 2025, Vietnam's GNI has expanded at an average annual rate of 10%, which is considered one of the strongest growth trajectories in the Southeast Asian region. The World Bank's classification is part of its annual assessment of 218 economies, where six countries, including Vietnam, were upgraded in income status. The Philippines, Sri Lanka, Jordan, and Micronesia also saw similar advancements.

Vietnam's ascent into the upper-middle-income category is part of a broader ambition to transition into a developing country with modern industrial capabilities by 2030, and ultimately achieve high-income status by 2045. To realize these goals, the Vietnamese government is aiming for an annual economic growth rate of at least 10% in the coming years.

“This is a confirmation of Vietnam's renewal process and acknowledges the achievements of the entire nation over the years.”Trần Hoàng Ngân, economist and National Assembly member

Economic experts have noted Vietnam's impressive growth story, particularly since the country has managed to increase its per capita income significantly over the past four decades. From a mere $95 in 1986, Vietnam's GNI per capita has increased 44-fold, outpacing other ASEAN nations such as Myanmar and Cambodia, which saw increases of 30 and 15 times, respectively.

Trần Hoàng Ngân, an economist and member of the National Assembly, emphasized that this recognition from the World Bank is a collective achievement for the nation. He noted that Vietnam's economic reforms initiated in 1986 have been pivotal in this transformation. “This is a confirmation of Vietnam's renewal process and acknowledges the achievements of the entire nation over the years,” he stated.

“To become a high-income nation by 2045, we must enhance productivity and ensure our economic growth translates into real income increases for citizens.”Trần Anh Tùng, economist at the University of Economics and Finance

Despite the positive outlook, experts like Trần Anh Tùng from the University of Economics and Finance in Ho Chi Minh City caution that to maintain this growth trajectory, Vietnam must enhance its productivity and ensure that economic growth translates into substantial income increases for its citizens. Tùng highlighted the need for an increase in the contribution of total factor productivity (TFP) to over 60% to achieve sustainable growth. Currently, TFP contributes about 45-47% to GDP growth, and elevating this ratio is crucial for lifting the economy without excessive reliance on credit expansion.

Furthermore, to foster domestic consumption as a growth driver, experts stress the importance of expanding the middle class, which currently accounts for around 60% of Vietnam's GDP. This involves ensuring that real incomes rise faster than inflation, allowing households to increase their purchasing power and stimulate demand across various sectors.

As Vietnam continues its journey towards becoming a high-income nation, the government and economic stakeholders must focus on leveraging its competitive advantages, such as a stable political environment and a favorable demographic profile, while also addressing challenges like inflation and the need for technological advancement.