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| Exports are one of the key drivers of Vietnam’s economic growth __Photo: VNA |
The World Bank’s decision to classify Vietnam as an upper-middle-income country after its gross national income (GNI) per capita reached USD 4,970 in 2025 stands as a significant milestone in the country’s development journey, reflecting sustained economic progress while also highlighting the need for deeper reforms to achieve high-income status.
Between 2021 and 2025, Vietnam’s GNI recorded average annual growth of around 10 per cent, underscoring the economy’s strong momentum.
According to the WB, this performance was driven primarily by a robust recovery in exports, which expanded by more than 15 per cent during 2024–2025, and by the country’s ability to sustain strong GDP growth of 7 per cent and 8 per cent in two consecutive years.
Dr. Le Duy Binh, an economist and Managing Director of Economica Vietnam, said the WB’s reclassification represents both recognition of Vietnam’s achievements and a call for more ambitious reforms as the country pursues the high-income status.
A key distinction, he noted, lies in the indicator used by the World Bank. While GDP measures the total value of goods and services within a country’s borders, GNI provides a broader assessment by capturing the income earned by a nation’s citizens and businesses regardless of where that income is generated.
The relationship between the two indicators is reflected in the formula: GNI equals GDP plus net factor income from abroad.
Vietnam’s GNI surpassing the World Bank threshold of USD 4,636 per capita therefore suggests that the country is no longer merely a manufacturing base with a GDP of USD 514.7 billion, but is increasingly capturing a greater share of value within global supply chains.
According to Binh, the achievement reflects nearly two decades of persistent efforts. Since joining the lower-middle-income group in 2009, Vietnam has spent 17 years advancing to this new development stage. However, he cautioned that the new classification should not be viewed as an end goal.
Moving into the upper-middle-income group is a stepping stone rather than a destination, he said, stressing that economic expansion alone is insufficient. Vietnam must simultaneously strengthen the foundations of long-term growth, including scientific and technological capabilities, innovation capacity, workforce quality, and its position in higher-value segments of global production networks.
The next phase of development will present more complex challenges, requiring fundamental changes in governance and policymaking to avoid the so-called middle-income trap.
Among the challenges are population ageing, rising social welfare demands, inequality and widening income gaps that can accompany rapid growth. At the same time, a larger economy will require greater energy consumption and resource use.
To ensure sustainable development and meet increasingly demanding global standards, Vietnam will need to accelerate green growth, improve resource efficiency and reduce emissions, he said.
Nguyen Thi Mai Hanh, head of the National Accounts Department under the National Statistics Office of the Ministry of Finance, emphasised that the WB’s reclassification is primarily a change in economic categorisation and does not mean Vietnam has become a developed country or significantly narrowed its income gap with advanced economies.
She noted that labour productivity, innovation capacity and overall economic competitiveness still require substantial improvement in the coming years.
Hanh also stressed that rising income rankings should translate into tangible improvements in people’s living standards rather than remain statistical achievements. She cited the National Statistics Office as saying that average monthly income of workers reaches nearly VND 9 million (USD 342) in the second quarter of 2026, slightly down by VND 53,000 from the previous quarter.
Meanwhile, household survey data showed that more than 96 per cent of households reported stable or higher incomes compared with the same period last year. Nearly 31 per cent said their incomes have increased, while more than 65 per cent reported no change.
Economists agree that the latest milestone demonstrates Vietnam’s success in moving beyond the initial stage of economic accumulation. The next chapter, however, will require a different development model focused on productivity, innovation and sustainability.
The new income classification is also expected to enhance Vietnam’s international standing. As the country’s economic scale and market size expand, its influence in international economic affairs is likely to grow accordingly.
Experts noted that larger economies generally possess greater negotiating leverage and stronger soft power in trade and economic relations. This could enable Vietnam to play a more proactive role in shaping next-generation free trade agreements and securing more favourable terms in international economic negotiations.- (VNA/VLLF)
